Last week, the turmoil in Indian equities put a cloud on public share sales lined up for this year. Regulatory approvals for as many as 19 initial public offerings (IPOs), valid for a year, expire in the next two months, a report by Financial Express stated. Most of these IPOs may not be able to hit the market within the given timeframe, a senior banker familiar with the matter told FE.
Together, these 19 firms aimed to raise anywhere between ₹23,000-24,000 crore, noted the report.
It further highlighted that companies have the option of letting the regulatory approval lapse or withdrawing their IPO and refiling. Gemini Edibles & Fats India withdrew its ₹2,500-crore IPO recently, said people in the know. Stitched Textiles and SSBA Innovations also withdrew their offer documents in August, regulatory filings show.
“Markets are still volatile. A few launches would happen but a deluge of IPOs is unlikely,” Pranav Haldea, managing director, PRIME Database told the market daily. “We have seen this in the past as well. If market conditions are not good, companies are happy to let the approval lapse.”
Experts suggest that there is a large pool of private capital available today and public markets are not the only source of funds.
“As we have seen lately, withdrawal of draft offers may happen for some issuers who may have imminent funding requirement or would want to pursue a strategic investment route instead,” further stated Ravi Dubey, partner, IndusLaw.
API Holdings, owner of India’s largest online pharmacy PharmEasy, for instance, withdrew its IPO last month, citing market conditions and strategic considerations. The company said it plans to raise funds via a rights issue, the report informed.
