India Inc raises 67% less money in first quarter
This is evident from an analysis of data on funds garnered by corporates from various routes, including IPOs, FPO, rights issues, debt, and private placements.
By ET Bureau |
Fund raising by India Inc has seen a sharp drop in the first quarter of financial year 2008-09. This is
evident from an analysis of data on funds garnered by corporates from various routes, including initial public offers (IPOs), follow-on public offers (FPO), rights issues, debt, and private placements.
The analysis shows that India Inc raised 67% less money in Q1���09 compared with the June quarter of the previous year. This also indicates the possibility of an impending slowdown in India Inc���s expansion plans.
Each of the fund raising routes has witnessed a sharp decline in collections during the June 2008 quarter. Corporates raised just over Rs 1,547 crore from IPOs, indicating a fall of 88% from the year-ago levels. The data on number of IPOs that were issued are not encouraging either.
In contrast to 21 primary issues in the Q1���07, only 13 IPOs were floated in the June 2008 quarter. This is also the lowest number of IPOs hitting the primary market in any of the June quarters in the past four years.
India Inc was also shy of raising money through the FPO route. Not a single FPO hit the market during the June 2008 quarter compared with two FPOs during the year-ago quarter. Poor investor response to primary issues and steeper valuations are major reasons why companies did not approach the market for the second time.
Even though the picture was gloomy for IPOs, FPOs and private equity funds, there was a moderate growth in funds raised through rights issues during the June 2008 quarter. The two rights issues that were floated during the quarter collected Rs 438 crore, reflecting a 20% rise over the year-ago levels. However, the number of rights issue has halved to two.
evident from an analysis of data on funds garnered by corporates from various routes, including initial public offers (IPOs), follow-on public offers (FPO), rights issues, debt, and private placements.
The analysis shows that India Inc raised 67% less money in Q1���09 compared with the June quarter of the previous year. This also indicates the possibility of an impending slowdown in India Inc���s expansion plans.
Each of the fund raising routes has witnessed a sharp decline in collections during the June 2008 quarter. Corporates raised just over Rs 1,547 crore from IPOs, indicating a fall of 88% from the year-ago levels. The data on number of IPOs that were issued are not encouraging either.
In contrast to 21 primary issues in the Q1���07, only 13 IPOs were floated in the June 2008 quarter. This is also the lowest number of IPOs hitting the primary market in any of the June quarters in the past four years.
India Inc was also shy of raising money through the FPO route. Not a single FPO hit the market during the June 2008 quarter compared with two FPOs during the year-ago quarter. Poor investor response to primary issues and steeper valuations are major reasons why companies did not approach the market for the second time.
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It is not only the number of IPOs and FPOs that have declined, but debt and private placement offers have also seen a steep fall. There were only 76 companies making private placement of debt vis-`a���-vis 147 in the June 2007 quarter. In terms of value, the collection through this route was 44% lower at Rs 14,095.6 crore. Even though the picture was gloomy for IPOs, FPOs and private equity funds, there was a moderate growth in funds raised through rights issues during the June 2008 quarter. The two rights issues that were floated during the quarter collected Rs 438 crore, reflecting a 20% rise over the year-ago levels. However, the number of rights issue has halved to two.
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