India Inc raises $1.2 bn through IPOs in Q1 2010

News Posted - 2010-04-14

NEW DELHI: Riding on robust Asian market recovery, twenty Indian companies raised a whopping $1.2 billion through initial share sale offers in the first three months of 2010, a period when global IPOs were worth over $53 billion, says a report.

"With 20 IPOs in the first quarter of the year, India had the third largest number of IPOs after China and the US," global consultancy firm Ernst & Young said in a report.

According to the report released today, with as many as 267 deals valued worth $53.2 billion in the March quarter, global IPO activity witnessed a five-fold growth during the period compared to 52 deals, which raised $1.4 billion in the corresponding period a year earlier.

"Global IPO activity in the first quarter of 2010 showed substantial improvement over Q1 2009. Results were driven by an ongoing robust Asian market and the revival of European listings," the report said.

The leading sectors in India were infrastructure, including logistics, real estate and construction, retail and information technology.

"India has made a good beginning in the first quarter of the year, we have experienced some successful issues which will attract many others to list. India is likely to witness heightened IPO activity in the second half of the year," E&Y India, Partner and National IPO Leader, R Balachander said.

"A number of companies were waiting for markets to look up since long and had postponed their capital raising plan for investment sentiment to improve. Many of them are likely listers this year," Balachander added.

China continued to lead global activity with 109 deals (accounting for over 41 per cent of total deals globally),and raising $19.4 billion (37 per cent of global fund raised).

Brazil saw five IPOs which raised $3.3 billion on the Bovespa.

"Fast growth companies from the BRIC countries continued to list on their local stock exchanges as there was no dearth of investible funds. Exchanges in India are now mature enough to source funding for the very large issues too," Balachander further said.

The leading sectors by funds raised globally were from the financial sector (particularly insurance firms), which raised $16.4 billion (in 16 IPOs); materials sector with $10.2 billion and industrial sector with USD7.9 billion.

"Emerging market activity continues to be strong, but we also saw a revival of activity in Q1 in key markets such as Tokyo, London, Paris and Frankfurt," Ernst & Young Global Vice Chair for Strategic Growth Markets Gregory K Ericksen said.

The $11 billion IPO of Japan's Dai-ichi Life Insurance was the largest in March quarter and the biggest in two years. Dai-ichi Life got listed on the Tokyo Stock Exchange in March.

Dai-ichi Life IPO was the biggest initial share sale offer since the $19.7 billion Visa IPO in 2008 and the largest Japanese IPO since NTT DoCoMo's listing in 1998.

"Despite concerns over volatile market conditions at the beginning of this quarter, we expect that investors will continue to return to the European and North American markets as the global economy improves," Ericksen added.

Source: ET 12/4/10