Concerning about the decline in capital-raising activities in the market, capital market regulator Securities and Exchange Board of India (SEBI) said Rs.60,000 crore worth of approvals and intentions to raise money were allowed to lapse or withdrawn, reports said, quoting Chairman U.K. Sinha.
"Between 2009 and October this year, 134 companies filed draft red herring prospectus (DRHPs) with SEBI to raise capital. But they either withdrew it or they allowed the SEBI observation to lapse," he said at the CII Capital Market summit in Mumbai.
He further stated that half the approvals and intentions lapsed during this year. Some of the companies that allowed their IPOs to lapse during 2012 include Reid & Taylor, Tata Autocomp, Micromax, Embassy Property, Joyalukkas, Lokmat Media and VRL Logistics. This year, companies have raised Rs.7,500 crore, of which 93 percent has been since August. A major portion of this was raised through rights issues and not IPOs.
"While the figure of Rs.7,500 crore may give us the impression that things are not too bad, the fact remains that capital-raising has come down substantially," he said, adding that if 95 percent to 100 percent of the issues are trading below the issue price, something is wrong with the pricing.
by RTT Staff Writer
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