The sea looks rough for IPOs now

Companies that were planning initial public offerings (IPOs), after being enthused by the recovery in he local equity markets last year, are being forced to wait because of the uncertainty caused by recent volatility.

L&T Infotech, the IT unit of engineer ng and construction giant L&T, had been planning to raise up to Rs 2,000 crore in what would have been one of the largest IPOs this year. The sale is now unlikely to take place this fiscal, bankers said.

Infibeam, the first ecommerce company planning to list its shares in the domestic market, may also postpone `450-crore IPO. Others such as Paits.rag Milk Foods, Amar Ujala Publications and Catholic Syrian Bank, which have received approvals from the Sebi for share sales, will wait for a more opportune time, bankers said.

“A company has to choose between timing and pricing of an issue -it cannot get both. Companies which have an urgency to give some investors an exit, raise funds or lower debt could still go ahead. But the volatility in the market now means that many may choose to wait,“ said KVS Manian, president, corporate and investment banking, Kotak Mahindra Bank. IPO filings with September quarter audited results are valid for 135 days, which means they will lapse by mid-February. After that, the companies will need to update the numbers.