India’s Only Second To US In IPO Debacle

After the US, India is worst-hit market when it comes to the postponement of IPOs in the first quarter of 2008. Out of the twenty four billion dollar worth of IPOs that were postponed, US accounted for $6.12 billion while the figure for Indian companies stood at $5.98 billion. The decision to defer or shelve IPOs has been taken because of market sentiments and the global credit crisis.

A total of seventy four IPOs were cancelled or postponed during the period, with US-based companies accounting for maximum thirty five cases worth $6.12 billion. India accounted for seven cases worth $5.98 billion. Interestingly, ninety percent of the value of the IPOs withdrawn were from real estate firms.

The most noticeable IPO withdrawal was of Delhi-based real estate developer Emaar MGF’s $1.6 billion. The company withdrew its offer after failing to muster enough investors’ interest. India’s leading property firms DLF, Unitech and Indiabulls too put off the listing of their real estate investment trusts (REIT) in Singapore following the change in global sentiments.

Country’s biggest real estate developer DLF had planned to mop up $1.5 billion through initial share sale of its office trust in Singapore, but postponed it after having got clearance from the Singapore market regulator. Similarly, Unitech put on hold its six hundred million dollar and Indiabulls two billion dollar listing plans.

In the days before Emaar MGF withdrew its IPO, Mumbai-based hospital chain Worckhardt Hospitals, too, had to withdraw its $177.6 million IPO.

One Comment

  1. Posted June 23, 2008 at 7:18 am | Permalink

    Initial Public Offering (IPO), also referred to simply as a “public offering”, is when a company issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded.

    In an IPO, the issuer may obtain the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market.

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