"The IPOs of such small and mid cap companies cannot be taken as a trend setter for the Indian capital markets. In such market situations, any company coming out with IPO means it is in dire need for funds," Nexgen Capital s Equity Head Jagannadham Thunuguntla said.

1. After four months, firms start daring IPO market
New Delhi, Feb 01, 2009 (Asia Pulse Data Source via COMTEX) –
New Delhi: Indian primary market is likely to witness some activity after a hiatus of four
long months with at least three Indian firms planning to enter the capital market, but
analysts are still not sure whether this could indicate revival in the IPO segment.
Chennai-based EdServ Softsystems and Gemini Engi-Fab, whose issues open this
week, plans to mop up about Rs 24 crore and Rs 45 crore respectively, as per data
available on the National Stock Exchange.
EdServ Softsystems would be hitting the capital market with an initial public offer of over
39.73 lakh shares and the company has fixed the price band in the range of Rs 55-Rs
60.
Gujarat-based Gemini Engi-Fab would come out with an IPO of 55 lakh shares to raise
an estimated Rs 45 crore.
Besides, Web18,a group company of Network18 has also made a confidential filing with
the SEC for a Nasdaq listing.
Earlier last week, Network18 Media had said that they have registered a draft
registration statement on confidential basis to the US Securities and Exchange
Commission for an initial public offering of American Depository shares.
Marketmen however believe the response from investors would be somewhat muted as
there is no appetite for investment and this does not indicate a recovery in the IPO
market.
quot;The IPOs of such small and mid cap companies cannot be taken as a trend setter for
the Indian capital markets. In such market situations, any company coming out with IPO
means it is in dire need for funds,quot; Nexgen Capital s Equity Head Jagannadham
Thunuguntla said.
The proposed fund raising by the two companies is nominal against the backlog of close
to Rs 75,000 crore (15.27 billion dollar) worth of IPO plans held back by about three
dozen companies due to the meltdown in the stock market last year.
After trying unsuccessfully in 2008, these firms including Anil Ambani group's Reliance
Infratel (Rs 6,000 crore), Adani Power (5,630), Jaiprakash Power Ventures (4,000) and

2. Kishore Biyani-led Future Ventures (2,660) are holding back their IPO plans for the right
market conditions, which experts believe is unlikely before the end of 2009.
Besides, there were talks of a mega 10-billion dollar (Rs 40,000 crore) IPO from state-
run Bharat Sanchar Nigam (BSNL).
The overall size of the IPO backlog from 2008 is more than four times of the total
amount actually raised during the year through this route and is almost equal to the
cumulative capital raised over the past three years.
Analysts said since recovery in the primary market comes about six months after that in
the secondary markets, it would be tough for such small and mid cap companies to mop
up funds.
quot;Investors are already pressed for funds. As the pedigree of the companies are not
known their outlook remains bleak,quot; Ashika Stock Brokers Research Head Paras Bothra
said.
Echoing similar sentiments Thunuguntla said: quot;At this juncture when secondary market
peers are trading at deep discounts, investors will look for bigger brand names for
investment. With such lesser known companies, there will not be much buzz and not
much of activity can be expectedquot;.
quot;Market can expect some meaningful recovery only with some big bang IPOs such as
Oil India and NHPC. Till then whatever small issues come, are unlike to get a robust
response from investors,quot; he added.
However, US-based investment management services firm Renaissance Capital holds
a different perspective.
In its outlook for IPOs in 2009, Renaissance Capital has said that historical precedents
suggest that IPOs in periods of low issuance can generate very strong returns as
companies become more realistic with their proposed valuations in order to successfully
raise capital.