<div><em>Currently, there are 14 companies with Sebi approval in the pipeline waiting to raise Rs 6,500 crore, writes <strong>Paramita Chatterjee</strong></em><br><br>Even as the GDP growth numbers are projected to improve with better prospects for the economy going forward, the IPO market continues to be sluggish.</div><div> </div><div>In the first two months of the current fiscal, as many as 4 IPOs were launched with companies raising Rs 1,880 crore, as per data available with Prime Database, the country's first database dedicated to the capital markets. These are by transport firm VRL Logistics, UFO Moviez India, a digital cinema distribution network and in-cinema advertising platform, the Agra-based PNC Infratech and toll management company MEP Infrastructure Developers. </div><div> </div><div>The total number of IPOs in the previous fiscal (2014-15) stood at 8 with companies raising a meagre Rs 2,770 crore.</div><div> </div><div>As per market analysts, there are several reasons behind this slow takeoff. While Sebi’s revised eligibility norms have limited potential issuers, greater disclosures and higher due diligence by the investment bankers are taking much longer time,” said Prithvi Haldea, Chairman at Prime Database. Also, the corporate sector is yet to start reporting better numbers and until that happens, the stories would be weak leading to lower valuations, he added.</div><div> </div><div>Currently, there are 14 companies with Sebi approval in the pipeline waiting to raise Rs 6,500 crore while another 8 companies are awaiting approval from the market watchdog to raise Rs 2,700 crore.</div><div> </div><div>“Despite the positive sentiment in the capital market over the last one year and visible green shoots of recovery, the primary market has not fully revived compared to the secondary market,” said Jagannadham Thunuguntla, Head of Fundamental Research at Karvy Stock Broking Limited. While the market requires a few success stories (great post-listing returns) that would prompt people to look at the IPO market seriously, investors continue to believe that there is still an upside available in the secondary market, where risks are comparatively lower and therefore are putting their money there directly or through the mutual funds.</div><div> </div><div>However, going forward, the current fiscal is expected to see a couple of IPOs, if not a not a flurry of them with overall sentiments improving. The current pipeline is very strong and many of these IPOs would be led by private equity firms who are looking at an exit.</div>
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