MUMBAI, JAN 17: The domination of the ICE (information, communication and entertainment) sector over the last two years - in the secondary as well as the primary market - had left the old economy as well as the traditional services sector in the cold. Not any more. The situation is now taking a turn in favour of the old economy. Courtesy the refocusing currently going on, the new year may witness a revival of sorts for initial public offerings (IPOs) from the old economy. "The steep fall in the share prices of ICE shares in the last three months has forced promoters and investors to be cautious about ICE IPOs. Many of the ICE companies which listed their shares recently are quoting below their offer prices," said an analyst. According to Prithvi Haldea of Prime Database, in fiscal 1999-2000, of the total 52 IPOs, 37 or over 71 per cent were from the ICE sector - 35 from IT and 2 from media. Continuing the trend, in the first 9 months of the current fiscal, of the 103 IPOs, 92 or over 89 per cent have been from the ICE sector - 77 from IT, 12 from media and 3 from telecom. "It may be recalled that the IPOs from traditional manufacturing sector haveever since 1995 taken a beating in the secondary market, partly due to theexcesses committed in the early 1990s and partly because of this sector itself being in severe crisis due to over-capacities, inefficienttechnologies, declining demand and high financial costs," Prime said. However, old economy is now back in favour. Even share prices of old economy companies like Reliance, L&T, HLL, oil PSUs and so on are back on the comeback trail. "Some of the interesting non-ICE issues that are in the pipeline, as perPrime, are from a pizza chain (Domino's), mosquito repellent firm (Godrej Sara Lee), printing presses (Repro and Thomson), resort (AverinaInternational Resorts), paints manufacturer (Jenson & Nicholson), petrochemproject (South Asian Petrochem), courier companies (Blazeflash and Elbee),beauty centre (Curls & Curves), travel agency (Kuoni), consumer electronics(LG), polymers (Pushpa Polymers), meters (Secure Meters), departmental store(Shopper's Stop) and packaging (Time Packaging)," Prime said. Also on the horizon, hopes Haldea, could at least be some of the PSUs which may decide on divesting through IPOs to the retail investor. Pharma hopefuls, according to Prime, include Paras Pharmaceuticals (Rs 150crore), Indo French Laboratories, Divi's Laboratories, Eros Pharma, NatcoPharma, Neuland and Indo-Euro Pharma. Also in the offing are IPOs from thebiotech sector: Shantha Biotechnics, Nectar Biotech, Maanya Biotech, BiogenBiotechnologies, Indfrag Biosciences and Micro Labs. Moreover, there couldbe some issues from traditional areas like textiles (Eskay K'nit) andsteel (Neelachal Ispat). Another dominant sector in the new year, according to Haldea, would bebanking. Banks have been a regular visitor to the IPO market. In 1999-00, bank IPOs included Syndicate Bank (Rs 125 crore) Centurion Bank (34) andTimes Bank (35) while in the first 9 months of the current fiscal, issueshave already been made by IOB (111) and Vijaya Bank (100). Though all new-generation private sector banks have already gone public, there are a large number of PSU banks which are still to tap the capitalmarket. The dictates of capital adequacy ratio, coupled with theGovernment's directives that such banks should fend for themselves for theircapital requirements, will witness several banking IPOs. "While Andhra Bank (Rs 150 crore) should be entering the capital market soon, others in the line are Allahabad Bank, Bank of India, Bank of Maharashtra Canara Bank, Central Bank of India, Corporation Bank, Punjab & Sind Bank, Punjab National Bank, Union Bank of India, United Bank of India and some of the SBI subsidiaries," it said. Some old-generation private banks like Lord Krishna Bank, Nainital Bank,Nedungadi Bank and United Western Bank have also announced capital raisingplans. Moreover, Centurion Bank should shortly be hitting the market with aRs 129 crore rights issue. Issues could also be expected from some housing finance companies, among them being Andhra Bank Housing Finance, BOB Housing Finance, PNB Housing Finance, Saya Housing Finance and SBI Home Finance. Significantly missing would be the core infrastructure sector, be it roads,ports or power. Surely though, the ICE sector, according to Haldea, would continue to play a significant role in the new year also. Some of the eagerly awaited IPOs from this sector, as per Prime, include Reliance Infocom (Rs 800 crore), NDTV, Escotel Mobile Communications, Nimbus Communications (182) Applitech Solutions (98), Datamatics (100), Mahindra British Telecom, Mid-Day, UTV Software (100), Ways India (117), Planetasia, HCL Perot, Venus Music and SET India, There is also a expectation in the market that the software giant TCS may finally decide to tap the IPO route.
