Eighteen companies, collectively planning to raise Rs 9,000 crore (Rs 90 billion) through initial public offers, will benefit from the Securities and Exchange Board of India’s new norms to extend the IPO validity period from three months to a year.
The market regulator, at its board meeting on December 4, approved the extension of validity period for public and rights issues from three months to a year, subject to filing an updated document with Sebi where there are material changes.
Seven companies, including two public sector undertakings — Oil India and NHPC (formerly known as National Hydroelectric Power Corporation) — and five private sector companies — Pipavav Shipyard, Gemini Engi-Fab, Sea TV Network, Astec Lifesciences and C Mahendra Exports — that got the Sebi approval between September and November will now get up to a year to float their issues.
The seven companies have planned to raise Rs 4,235 crore (Rs 42.35 billion) from the primary market. NHPC has filed the offer document to raise Rs 1,670 crore (Rs 16.7 billion), while Oil India has planned to mop up Rs 1,400 crore (Rs 14 billion), with Pipavav Shipyard and C Mahendra Exports looking at tapping the capital market with Rs 700-crore (Rs 7 billion) and Rs 300-crore (RS 3 billion) public issues respectively.
Another eleven companies, which are targeting to shore up Rs 4,765 crore (Rs 47.65 billion), are in the process of filing their offer documents with Sebi. The companies includes Bharat Oman Refineries (Rs 2,400 crore), Godrej [Get Quote] Properties (Rs 750 crore), Ajanta Manufacturing (Rs 300 crore) and Triveni Infrastructure (Rs 225 crore).
However, Adani Power (Rs 5,630 crore) and Future Ventures (Rs 2,660 crore) are unlikely to benefit from the Sebi norms. The market regulator had approved their IPO documents on September 4 and their validity period expired on December 3, a day before the market regulator announced the new IPO rules.
The unfavourable market condition and a poor response from retail investors have seen about 40 firms, which were planning to raise Rs 29,272 crore (Rs 292.72 billion) through IPOs, allowing the Sebi approval for their public offers to lapse.
Issues of Reliance Infratel (Rs 6,000 crore), Jaiprakash Power (Rs 4,000 crore), UTI AMC (Rs 2,000 crore), Acme Tele Power (Rs 1,200 crore), DB Corp and Mahindra Holidays & Resorts (Rs 1,000 crore each) and MCX (Rs 600 crore) have pulled out of the market in recent times.