IPO story in India in 2010

Indian firms have raised more than $15 billion so far this year from share sales, third in Asia after China's $103 billion worth of issuances and Hong Kong's $18 billion, according to Thomson Reuters data. Bankers said total equity offerings in India could reach $25 billion to $30 billion in 2010, making it the best year since 2007 when $31 billion was raised from 202 issues, and compared to $20 billion last year.


Sept 21 - 25 : Busiest week for IPO market in 15 years - a choice of 11 IPOs

This week is slated to be the busiest in the last 15-years for the primary market, with eight companies seeking to raise around Rs 3,000 crore through public offers, in addition to three already underway.


The companies, which are hitting the primary market this week include, Orient Green Power (Rs 900 crore), VA Tech Wabag (Rs 500 crore), Electrosteel (Rs 285 crore), Tecpro Systems (Rs 268 crore), Ashoka Buildcon (Rs 225 crore) and Gallant Ispat (Rs 40.50 crore).While Ramky Infrastructure and Cantabil Retail will hit the capital market with issue sizes of Rs 530 crore and Rs 105 crore respectively.

Indian Companies doing IPOs in US - MakeMyTrip


MakeMyTrip, the parent firm of India's largest online travel company, MakeMyTrip India, is selling the first U.S. initial public offering (IPO) by an Indian company in four years at a 26 percent premium to the biggest online travel agencies

MakeMyTrip will be the first IPO by an India-based company in the U.S. Morgan Stanley is the sole book running manager to the offering and Oppenheimer & Co Inc and Pacific Crest Securities LLC will act as co-managers.

MakeMyTrip is offering 5 million shares at $12 to $14 each. The India-based company at 5.41 times next year's sales, higher than the average of 4.28 for U.S.-traded stocks from Expedia to China's ELong.

MakeMyTrip booked about 48 percent of the $1 billion in online travel reservations made in India last year. Yatra.com and Cleartrip.com accounted for a combined 42 percent of sales.

Companies with recently concluded IPOs

Recently, public issues of a number of entities including SKS Microfinance, Prakash Steelage Ltd and Gujarat Pipavav Port Ltd got good response from investors and were oversubscribed. Listing of these firms was also impressive. The follow-on public offer of the state-run Engineers India Ltd also received big investor response.

Continued below are details about some famous IPOs that have happened in the recent past.

SKS Microfinance

When SKS Microfinance launched India’s first initial public offering (IPO) on July 28, 2010, the total share issue received bids for 13.55 times the overall shares on offer, with the institutional share offer oversubscribed by 20.3 times. The share bids were at the high end of the INR 850 to 985 (USD 18.42 to 20.04) price range. SKS Microfinance allocated 3.02 million shares at INR 985 (USD 20.04) per share to 36 anchor investors, including: ICICI Prudential, an Indian life insurance company; BNP Paribas, a French global banking group; Nomura, a Japanese global investment bank; Reliance Capital, an Indian non-banking financial company; and three U.S.-based financial institutions, JP Morgan, Morgan Stanley and Goldman Sachs.

SKS Microfinance is an Indian microlender that delivers microfinance products through a group lending model to impoverished women in India and had total assets of USD 596 million at March 31, 2009. SKS Microfinance was founded by Vikram Akula and is backed by venture capital fund investors Quantum Hedge Fund, Sequoia Capital and Sandstone Capital.

Engineers India Limited

Incorporated in 1965, EIL is an engineering consultancy company providing design, engineering, procurement, construction and integrated project management services, principally focused on the oil and gas and petrochemicals industries in India and internationally. Over the Years, it has developed expertise to cater the needs of petrochemicals, fertilizers, metals, & Power sectors, however currently more than 90% of business comes from hydrocarbon sector.



Objects of the Issue : To dilute GOI holding as a part of disinvestment Plan, proceeds will go to GOI.
The government holds 90.4 per cent stake in EIL, which provides design and engineering services for petroleum, power and fertiliser companies. Post FPO, government holding in EIL will fall to 80.4 per cent.

The government set Rs 270-290 as the price band for the follow-on public offer (FPO) of state-run Engineers India Ltd (EIL). The Rs 977-crore FPO had received an overwhelming demand from all market participants, including retail investors, making it one of the best divestment offers by the government so far this fiscal. In the portion reserved for institutional buyers, the FPO was subscribed 23.43 times. The government, which holds a little over 90 per cent in EIL, is selling 10 per cent stake through the FPO.


The issue price of  Rs 290 was determined by the government for public sector EPC and consultancy firm Engineers India Ltd (EIL). This is the upper end of the price band. “Issue price has been fixed at Rs 290 a share. A discount of 5 per cent will be given to retail bidders and to employees,” officials sources said.
The public issue, which was oversubscribed 13 times, will fetch Rs 950 crore to the government. The offer was open between 27 July  to 30 July. The government is offering a discount of five per cent to retail investors– an allotment price Rs 275.50 a share.