Helping You Build Wealth With Honest Research
Since 1996. Read On...

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Revealed
India's Third Giant Leap

This Could be One of the Biggest Opportunities for Investors




Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
By submitting your email address, you also sign up for Profit Hunter, a daily newsletter from Equitymaster
covering exciting investing ideas and opportunities in India.

AD

Will MCX revive the IPO market?
Fri, 17 Feb Pre-Open

In 2010 Indian companies mopped up a massive US$ 8.3 bn through the primary route. The capital it raised was the fourth largest in the world, according to data from Ernst & Young. But things completely reversed in 2011. The Initial Public Offering (IPO) market completely dried up in 2011. During the last calendar year (2011), the primary market saw only 39 equity offerings with total size of Rs 140.2 bn. The response to these IPOs was mostly tepid with only a few IPOs like Muthoot Finance and Lovable Lingerie seeing significant investor demand. Other companies saw muted response and almost 30 players had to shelf their listing plans. Only one public sector offering of Power Finance Corporation came through last year, netting Rs 11 bn for the government. Well, the performance of the primary market pretty much followed the secondary market trend, which tanked about 25% in 2011.

So will 2012 be any better? Well fortune favours the brave and Multi Commodity Exchange (MCX) is the first company to take the plunge this year. Plus it will have the distinction of being the first listed exchange in the country. This offering will be the most significant one in more than six months. The company plans to raise Rs 7.5 bn from the markets. The success of this offer could possibly set the tone for other companies to follow. Already talks are being revived for the follow on offerings of PSU behemoths Oil and Natural Gas Corporation Ltd. (ONGC) and Bharat Heavy Electricals (BHEL).

In a huge reversal of losses from last year Indian stock markets are already up 17% on a YTD basis. With secondary market sentiment improving, it seems to be a good time for the MCX-IPO. A plus point is that the company has a good promoter background and healthy financial statements. However judging this one company to be the harbinger of good tide for the IPO market may not be justifiable. While inflation numbers have reduced and there is anticipation of monetary loosening, the story hasn't changed much. Globally a lot of uncertainty is still afoot and GDP growth is also slowing in India. Investors would be advised to not jump back into the IPO market based on momentum but rather look for solid companies with strong fundamentals.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Will MCX revive the IPO market?". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited).

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.