With investors burning their fingers in several new public issues, the equity issue market is going from bad to worse. The amount raised through equity issues during the year 2001-02 fell to Rs 1,082 crore representing a significant decline of nearly 56 per cent from Rs 2,475 crore raised in 2000-01.In terms of the number of public issues, the year will go down as probably the worst year in living memory, with only 19 issues hitting the market. This represented a significant 85 per cent decline from 124 issues in 2000-01, and was nowhere near the high of 1,428 issues in 1995-96. Debt issues to fill gap MUMBAI: In terms of amount raised though public issues, the year 2001-02 managed a mobilisation of Rs 6,423 crore, through both debt and equity issues, which was only 3 per cent lower than the preceding year which had closed at Rs 6,618 crore. But for the 13 debt issues which in fact dominated the issuance, mobilising Rs 5341 crore or 83 per cent of the total, the year would have done badly on the amount front also. Like the last year, the issues were restricted mainly to 2 financial institutions, and there was no debt mobilisation by the corporate sector. ‘It is alarming that the collective mobilisation in the last 6 years at Rs 12,843 crore is still lower than the single year mobilisation of Rs 13,312 crore in 1994-95.’ Out of Rs 1,082 crore, nearly 77 per cent was accounted for by just one issue (Bharti), which incidentally was also the first 100 per cent book-building issue in the country.The second largest issue was that of PNB aggregating Rs 164 crore. Of the remaining 4 companies, 3 were small IT sector issues aggregating Rs 9 crore, while the only manufacturing sector issue was from South Asian Petrochem for Rs 70 crore. According to Prime Database, the response to most issues this year was poor to moderate. In fact, 1 issue (South Asian Petrochem) devolved on the underwriters and as many as 3 issues—SMR, City Online and IMAP just scraped through. Moreover, while Bharti managed an overall oversubscription, the retail portion of its issue failed to enthuse enough investors. On the positive side, only the PNB issue managed an oversubscription of 4.29 times, mainly because of under-pricing.
