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

Pick in fund raising activity on strong sentiments
Fri, 23 May Pre-Open

With a downturn in business climate, a number of companies were suddenly caught on the wrong foot. The slowdown in demand hit them hard throwing their cash flows out of gear. In their struggle to service existing debt, they piled on further debt. At that time the capital markets in India were literally closed to these companies. However, the tide seems to be turning in India Inc.'s favor as we have a stable government at the center. The government in power is perceived as pro- reforms which will revive economy and business prospects of Indian companies. Such strong optimism has led to jump in valuations of companies' and therefore a spate of capital raising activities such as Qualified Institutional Placement (QIPs), block deals and offer for sale are expected.

As per a feature in Economic Times, a global investment bank has received mandates from seven Indian companies to raise at least US$2 bn through QIPs. This signals the start of the fund raising activity in the markets. But the markets have run up sharply and may witness a correction or the upside could be limited. However, the long term potential of investing in the Indian markets continues to remain robust. Therefore, a momentum in fresh capital issuance is likely to pick up sooner than later.

However, all said and done, we reiterate investors to perform due diligence before investing in equity issues as the pipeline of companies wanting to raise capital is very huge. This is because in a strong sentiment-based rally, more often than not the fundamentals are often ignored and investors find themselves trapped in poor quality stocks. Although sitting on the fence could be the last thing investors can do in such an interesting phase for the capital markets. Having said that the scenario is still not as aggressive as post-2009 when almost every investment bank had more than 5 mandates for raising money. In fact, the activity is moving at a slow pace and is largely towards reform dependent sectors such as power and infrastructure. Investors should still trade cautiously rather than investing blindly. This way investors can minimize chance of burning their fingers.

Do you think the pick-up in fund raising activity signals good times ahead in stock markets? Share your views on the Equitymaster Club.

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 "Pick in fund raising activity on strong sentiments". 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.