Firms mobilise Rs 21,432 cr in ’04-05

The huge increase this year came by way of fresh capital raising, up at Rs 14,869 crore from Rs 2,307 crore. A total of 27 companies raised fresh capital during the year, according to Prithvi Haldea of Prime, the country’s premier database in the primary capital market.

However, in terms of offers for sale, the amount fell down substantially, according to Prime, to Rs 6,563 crore from Rs 15,514 crore in the previous fiscal. It may be recalled that of the 12 offers for sale in the previous year, majority had been made by PSUs, which together had accounted for Rs 15,127 crore.

Though the number in 2004-05 fell marginally to nine companies which made offers for sale, the reduction came due to only one government divestment (NTPC) offering of Rs 2,684 crore. The remaining offers were from promoters, shareholders and venture funds.

Significantly, according to Haldea, the number of issues hitting the market continued to remain small. The year 2004-05 had exactly the same number as the previous fiscal at 29 issues each. The average deal size, however, increased to Rs 739 crore from Rs 615 crore.

The year saw a near-demise of small issues; there were only two issues of below Rs 10 crore (previous year was four). Of the 29 issues, though only 19 were made through the book-building route, these contributed over 98 per cent of the total amount, quite similar to 94 per cent in the previous fiscal.

Public offerings by listed companies continued during the year, as per Prime. Compared with three such companies last year raising fresh capital of Rs 494 crore and seven companies divesting for Rs 14,136 crore, the year 2004-05 witnessed four companies raising fresh capital of Rs 3,433 crore and two divestments aggregating Rs 3,336 crore. The remaining 23 cases were IPOs.

The response from the public to the equity issues of the year on the whole was excellent, according to Haldea. The main reason for the performance of the primary market was the buoyant secondary market almost through out the year.

The economic resurgence and the stable political climate only further improved the scenario.

The cost of projects of all the companies which entered the market during the year aggregated a meagre Rs 1,184 crore.

The largest project of the year, for which a public issue was made, was that of SAL Steel (Rs 203 crore). The year also witnessed, according to Prime, a near-demise of regional stock exchanges. All 29 issues went for listing at BSE/NSE, with four companies also additionally opting for listing at a couple of regional exchanges.