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India Inc cashes in on bull run

Calcutta, Dec. 26: A bullish stock market has helped domestic companies raise a record Rs 45,137 crore from share offerings to the public in the primary capital market compared with Rs 24,679 crore in 2006.

More than 95 per cent of it was raised as fresh capital for capacity expansion, setting up new units and acquisitions. But promoters and private equity investors also made a killing by selling part of their holdings through public offerings.

According to Prime Database, a research firm tracking the public issue market, a total of 107 public issues hit the stand this calendar year and mobilised Rs 45,137 crore. “There were 92 public issues in 2006, which mopped up Rs 24,679 crore. Capital mobilisation this year is 83 per cent higher than last year,” said Prithvi Haldea, chairman and managing director of Prime Database.

As much as Rs 43,060 crore was raised to fund capital expenditure such as capacity expansion, the setting up and the acquiring of units.

“Another Rs 2,077 crore was raised through offers for sale, in which the money went into the pockets of promoters and other investors who sold their shares to make a killing,” Haldea noted.

In 2006, Rs 942 crore of a total Rs 24,679 crore raised through public issues was from offers for sale of shares by promoters. In percentage terms too, money mobilised through offers for sale was higher at 4.6 per cent than 3.8 per cent last year.

The bond market was active too. Companies raised Rs 1,000 crore this year through bond issues against none last year.

In six of the 107 issues, companies tapped the capital market for a second or third time. Follow-on issues mobilised about Rs 10,928 crore. There were as many as 19 follow-on public issues in 2006 that could raise only Rs 4,817 crore.

“The 101 companies that hit the capital market for the first time collectively raised Rs 34,209 crore compared with Rs 19,682 crore by 72 IPOs last year,” Haldea said.

This year, the domestic primary market also saw a dozen real estate companies tapping the capital market and mobilising Rs 15,185 crore, or 33 per cent of total fund raised, led by DLF, which alone mopped up Rs 9,187.50 crore.

Banks were second in the fund-raising spree with four mobilising Rs 12,639 crore, or 28 per cent of the total. ICICI Bank’s follow-on offer led the pack as the issue mobilised Rs 10,044 crore.

There were half a dozen public issues that raised over Rs 1,000 crore each.

The number of such mega issues was five last year.

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