Big ticket public sector IPOs to hit capital market soon: Analysts
19 May 2009, 1910 hrs IST, PTI
NEW DELHI: The initial public offering of public sector undertakings is all set to see the light
of day as experts feel that after the decisive win of the Congress-led UPA in the 15th Lok Sabha
elections divestment of stake in the PSU companies would be put on fast-track.
IPOs of two public sector undertakings -- NHPC and Oil India -- are expected to hit the capital
market by September.
\"Divestment would feature in the reform agenda of the UPA government. A host of PSUs are
waiting to go public, the government might consider to divest its stake in those entities,\" Capital
Market expert Prithvi Haldea said.
According to the data compiled by SMC Capitals, 18 firms are planning to hit the capital market
with issue size totaling Rs 7,405 crore. This includes the big ticket IPO of Oil India of Rs 1,400
crore and NHPC's Rs 2,060 crore.
\"IPOs of the PSU entities can bring in a revival in the capital markets (with) the stock market
showing signs of recovery,\" SMC Capitals Equity Head Jagannadham Thunuguntla said.
He added, \"The government would concentrate on divesting their stake in these companies as the
burden of fiscal deficit is looming large on them. The amount raised can be put into the system\".
A host of IPOs, which are in the pipeline, including that of BSNL, railway consultancy firm
RITES, National Aviation Company and Ircon International would also be put on fast track now,
analysts say.
\"With the secondary market now in the rally mode, the union divestment ministry would get
active and would fast track the stake divestment process,\" Thunuguntla said.
The fund mobilisation of the government by way of IPOs has declined in 2008 there was only
one PSU IPO of Rural Electrification Corporation worth Rs 1,421 crore.

In 2007, there were four PSU IPOs, including that of PGCIL and PFC, worth Rs 5,580 crore.
\"Confidence has started to built up with the formation of a stable government. IPO filings are
expected to go up,\" SMC Global Vice-President Rajesh Jain said.
The market saw a decline in the number of issue in 2008, as the stock markets crumbled from
21,206.77 points in January to a low of 7,697.39 points in October.
\"The confidence of the market would be restored if the PSU IPOs generate good response. Till
now investors are shying away from putting money in new companies. As PSU IPOs are
reasonably priced, it can enthuse investors,\" Thunuguntla said.