Jagannadham Thunuguntla, head- equity, SMC Capitals talks about Future Ventures as the first IPO whose SEBI validity expired

1. Future group firm lets tryst with IPO lapse
September 5, 2009
Future Ventures has become the first company, which failed to launch its initial public offering (
IPO) before its regulatory approvals lapsed on September, 3 ( Thursday). This is the first of 18
proposed IPOs that had received the regulatory approval before the recent general elections.
The venture fund belonging to Kishore Biyani's Future group is not even considering pursuing the
IPO any further. " As of now, we have not made any decision on pursuing the IPO," said the group's
spokesperson responding to an e- mail sent to Biyani.
" Last year we obtained the necessary Sebi (Securities and Exchange Board of India) approval for the
IPO. But the approval has elapsed in the 12 months time specified by the regulator," the
spokesperson added. Future Ventures was given approval as a non-banking finance company
(NBFC), though it was proposed to be structured in the form of a venture fund.
Before September 2008, the Sebi approval had a lifespan of just three months. Sebi extended this
timeframe to 12 months after approvals of over 22 companies lapsed before September, including
that of the mega issue of MCX, the largest commodities exchange in the country.
SMC Capitals, a Delhi-based investment banker, identified 18 companies that were armed
with such 12-month approval as the IPO probables immediately after the near-majority verdict for
the United Progressive Alliance (UPA) led by the Congress formed the government in May 2009.
After the election results, the Bombay Stock Exchange (BSE) index Sensex had vaulted by 2,000
points in a couple of minutes of actual trading, giving hope for IPO proposals that lay buried at that
time. Eight of the approvals were to expire during 2009, including that of Future Ventures. Another
four companies have the D- day ending during this month - Oil India Ltd ( September 10), NHPC
and Pipavav Shipyard ( both on September 17), and Sea TV Network ( September 22).
NHPC had been listed much ahead of the D- day. OIL is scheduled to hit the market on Monday (
September 7). Pipavav is scheduled to launch its offering on September 16, a day ahead of expiry of
its regulatory approval.
There is no news on Sea TV issue as yet.
The other three companies - C Mahendra Exports Ltd ( no news yet), Astec Lifesciences Ltd ( they
are said to be in talks with investment bankers), and Rishabhdev Technocable Ltd ( no news yet) -
could hit the market in November or December as the case may be, said Jagannadham
Thunuguntla, head- equity, SMC Capitals.

2. And the remaining 10 companies can plan their issues even more comfortably as their approvals
lapse only in 2010. But the strong secondary market afforded an opportunity for Mahindra Holidays,
Raj Oils, Excel Infoways and Globus Spirits to raise funds.
However, some companies like Jindal Kotex have hit the market in about a month of their obtaining
Sebi approval, due to better market conditions, Thunuguntla added.
Due to adverse market conditions, secondary market was in the doldrums since mid- January 2008,
failing three IPOs that had already hit the market, and forcing 90 other IPO aspirants to abandon
their proposals in 2008.