Lavasa IPO drill

Mumbai, July 1: Lavasa Corporation Ltd, an arm of Hindustan Construction Company (HCC), is planning to raise Rs 750 crore through an initial public offering.

Lavasa has filed a draft red herring prospectus with the Securities and Exchange Board of India today. This will be the first major IPO application after the Narendra Modi-government came to power.

The company expects to offer around 75 per cent of the shares to qualified institutional buyers, 15 per cent to non-institutional bidders and just 10 per cent to retail investors, though they may get a discount.

Key market indices are close to their record highs on hopes that finance minister Arun Jaitley will announce reform measures in the budget.

Analysts believe that the developments in the Centre will breathe fresh life into the dormant primary market, which saw companies withdrawing their proposed issues.

According to Pranav Haldea, managing director of PRIME, the last fiscal ended with a mobilisation of only Rs 1,205 crore through IPOs. During the year, there was only one major offer — Just Dial.

He pointed out that the markets had not been IPO-friendly for the last three years because of a variety of factors. This includes overall poor sentiments, market volatility, promoters not getting the right valuations and the lack of appetite for big issues from the infrastructure sector.

However, he avers that the current fiscal will see a revival of the IPO market. There is not only a pent-up demand but also private equity firms and other institutional investors are desperately looking at an exit.