Adani Power IPO to sizzle capital market this week
New Delhi: The Indian primary market is back on track and Adani Power`s Rs 3,000 crore IPO – the
second biggest ever public offer -- this week is likely to sizzle it further.
The IPO of Adani Power, promoted by the owners of Mundra Port & SEZ, opens on June 28 and plans to
mop up to Rs 3,016 crore from the primary market. This is the second biggest in country`s history after
Reliance Power.
So far this year four companies have hit the primary market but the IPO of Mahindra Holidays & Resorts
enthused the corporate world to raise funds from the capital market.
The issue of Mahindra Holidays was over subscribed nearly 10 times and the company mopped up Rs
301 crore from the primary market.
"The Indian IPO market is mostly back on track after a hiatus of over a year. Foreign investors are
showing confidence by subscribing to the securities and the fund raising by India Inc is gaining strength.
"Since the Adani Power IPO is being brought about by a big business house a lot of investors are keeping
their money aside to invest in it after the pre-IPO placement garnered a good response. FIIs are also
showing confidence and investing in big issues," SMC Capitals Equity Head Jagannadham
Thunuguntla said.
Marketmen believe the response towards Mahindra Holidays IPO signals that the confidence of the
investors are coming back and the green-shoot of revival is here.
Faced with uncertain financial conditions and economic sluggishness, firms have been holding back their
IPO plans. But with signs of a revival and confidence of foreign investors, experts feel the segment would
witness frenzied activity.
With about Rs 4,000 crore expected to be mopped up by the government by divesting stake in two PSUs
-- NHPC and Oil India -- analysts feel companies are waiting on the sidelines to tap the market after
witnessing their response.
"Confidence in the ecosystem is back after projects took a back-seat due to lack of fund arrangement.
Companies` fascination for IPO is back of track," Thunuguntla added.
In July this year two IPOs -- Excel Infoways and Raj Oil Mills -- got fully subscribed on the final day of
offer, and raised a total of over Rs 190 crore from the primary market. Earlier in February, Chennai-based
EdServ Softsystems managed to raise over Rs 20 crore.
At the beginning of 2009, there was a back log of about Rs 75,000 crore worth of IPO plans, including
Anil Ambani`s Reliance Infratel (Rs 6,000 crore), Jaiprakash Power Ventures (Rs 4,000 crore) and Future
Ventures (Rs 2,660 crore).
As many as 33 companies last year raised over Rs 18,000 crore via the IPO route, of which the bulk of
the volumes came from the biggest IPO so far, mainly from Reliance Power`s over Rs 11,000 crore in
January.