The Telegraph
Since 1st March, 1999
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Prospects bright for new issues

Calcutta, Sept. 5: The equity market is on a roll, but has the primary market revived as yet'

Prithvi Haldea, managing director of Prime Database, says 579 companies have indicated plans to raise up to Rs 50,000 crore by issuing shares.

“If even 100 of these companies hit the market, I’d say the primary market has revived,” Haldea said, addressing a seminar on capital markets in Calcutta today.

“The 579 companies that I mentioned include the likes of Tata Consultancy Services (TCS) that said it would go public as early as in 1994. It hasn’t as yet,” Haldea added.

The initial public offering (IPO) of Maruti Udyog was a great success. Not only was it oversubscribed many times, the appetite for the stock even after listing was quite remarkable.

Two public sector banks — UCO Bank and Indian Overseas Bank — are raising Rs 240 crore each at present. Indian Overseas Bank’s IPO opened today. Uco’s IPO that opened on Wednesday, was oversubscribed on the very first day.

A few other companies are planning to raise capital soon, including TCS, which was reported to be looking to go public later this year.

Indraprastha Gas, a company jointly promoted by Gail India and British Gas, has already filed its offer document with the Securities and Exchange Board of India (Sebi).

Bull runs in the equity market are known to trigger flurry of IPOs. During the rally in the early nineties, hundreds of companies went public, but many of them disappeared leaving investors high and dry.

Even a couple of years ago, during the technology boom, a large number of IT companies raised capital. A large number of them disappointed investors.

With the formation of the Central Listing Authority, which is going to be functional within the next two to three months, investors could expect IPO applications to be scrutinised closely.

Haldea, who is on the board of the authority, said it would vet all applications to raise capital including preferential allotments to select group of investors.

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