X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
IPOs: Prospects under cloud - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Mar 15, 2001

    IPOs: Prospects under cloud

    The carnage of TMT scrips on the bourses has taken a toll on the Initial Public Offering (IPO) market. IPOs have progressively dried out. Having said that, there are some factors, which could probably bring cheer to those companies that have been postponing their issue plans for quite some time.

    Mr. Yashwant Sinha, in his Budget for the year 2002, has made an important amendment to stimulate the IPO market. Effective from April 2001, long-term gains if re-invested in public issues would be exempted from purview of tax i.e. any long-term gains, say gains from sale of equity or a mutual fund, if invested in an IPO will not be taxed. But there is a catch here. There is minimum lock-in period of one-year. This could potentially encourage investors to invest in an IPO.

    After a dry spell, a number of companies have filed their draft offer document with the Securities and Exchange Board of India. This include three media issues namely, Manipal Media, Nimbus and UTV whose public issue have been delayed by six months atleast. Reportedly, these companies have again postponed their public issue due to depressed market conditions. Interestingly, two trading companies have also filed their offer document that includes Datum and Raj Securities. However, there is only one offer document filed by an IT training company, St. Angelo Computers.

    Company Issue size (Rs m) Sector Lead Manager
    UTV Software Communications Media Kotak Mahindra Capital Company
    Raj Securities 13 Investment Financial Management Sevices
    St. Angelo Computers 35 IT Training Brescon Corporate Advisors
    Nimbus Communications Media SBI Capital Markets
    Manipal Media Network 1,336 Media SBI Capital Markets
    Datum Securities 13 Investment Financial Management Sevices

    But will these issues sail through successfully? This primarily depends on sentiment in the secondary market. Given the fact that the benchmark BSE Sensex has fallen by 14.6% in the last one-month (14th February to 14th March 2001) and the battering that the TMT scrips are witnessing, the prospects of these issues would remain under a cloud. Secondly, on the valuation front a lot of the existing established companies in all sectors are looking very attractive. This could further channelise funds into the secondary market vis--vis primary issues.

    So, until SEBI takes corrective action to bring in more transparency in the markets and restore investor confidence, these companies should keep their fingers crossed.

     

     

    Equitymaster requests your view! Post a comment on "IPOs: Prospects under cloud". Click here!

      
     

    More Views on News

    Sorry! There are no related views on news for this company/sector.

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    More
    Copyright © Equitymaster Agora Research Private Limited. 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.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (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 or Canada, 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.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE IPO


    Aug 18, 2017 (Close)

    MARKET STATS