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Globally, IPO activity fell by 45% compared to 2010 due to the European debt crisis and S&Ps downgrading of the US credit rating
The Asian stock exchanges recorded a drop of 56% in capital raised ($77.7 billion) compared to 2010 ($177.6 billion)
US exchanges performed relatively better raising 12% less capital than the previous year On the contrary, European exchanges raised 1% more capital in the same period
The volume of deals fell from Jan 11 to Nov 11, with only 1,117 IPOs listings, compared to 1,393 deals in 2010
$155.8 billion was raised in the first 11 months in 2011 through these deals compared to the $284.6 billion in 2010
The average deal size fell from $204 million to $139 million
72% of the total capital was raised in the first six months of 2011 prior to the European debt crisis
China dominated the IPO market with 356 new listings (32% of the global volume *) in 2011 out of which 75 companies were listed overseas
India contributed 3.5% of global IPOs (in terms of volume) in 11 months ending 30 Nov 11, compared to 4.9% in 2010
1,393
Global Volume
1,117
762 577
CY 08
*Till Nov11
CY 09
CY 10
CY 11
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European IPOs comprised 36.5% of total global IPOs contributing $36.8 billion IPO proceeds and activities have fallen dramatically in the Middle East from $2,130 million to $789 million in the same period in 2011, with only 9 IPOs
New York Stock Exchange topped the list on the basis of funds raised with $33.3 billion followed by Shenzhen Stock Exchange and Hong Kong Stock Exchange
The top three exchanges by deal activity are the Shenzhen stock exchange (226 IPOs), Warsaw Stock exchange (117) and Australian Securities Exchange (93)*
China 52.7%
168
134
98 105
68
39
22 36 Japan
30
23
22 21 LatinAmerica
12 GCC
#
Europe
*From Jan11 Nov11
Greater China
US
Australia
India
Singapore
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Top five IPOs in 2011 included two companies from the US, a transportation company from Singapore, a mining company from Switzerland and a banking group from Madrid
Glencore Internationals $10.3 billion was the largest IPO of the year across the globe in 2011 listed on both London and Hong Kong
Stock Exchanges followed by the $5.5 billion IPO of Hutchison Port Holdings
It was just 46.6% (in terms of value) of the largest IPO of 2010 (Agricultural Bank of China, $22.1 billion)
Bankia
HCA Holdings Kinder Morgan Prada
Madrid
NYSE NYSE Hong Kong
08 Jul 11
09 Mar 11 10 Feb 11 17 Jun 11
4.4
3.8 2.9 2.1
Banking
Healthcare Services Pipelines Apparel
(28%)
(18%) 29% 28%
28 Sep 11 09 Dec 11
08 Dec 11 13 May 11
2.1 2.0
2.0 2.0
(8%) (18%)
11% / 23% (46%)
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The IPO activity was distributed evenly throughout the four quarters with all the IPOs in the fourth quarter issued in the month of October Only 2 IPOs oversubscribed by more than 10 times(Lovable Lingerie and Muthoot Finance) The average subscription was a mere 2.25x.
Volume Trend (2008-2011)
68 10 10
25 IPOs aiming to raise around ` 310 billion were withdrawn. Power and Realty sectors were the major casualties
8 37 39
Q1 Mar' 12
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investments. As a result, during the second half of the year, FIIs turned net sellers and
there was no liquidity left in the market There was very little excitement in the IPO market with only one issue getting listed in the last 2 months of the year
The last quarter of 2011 contributed to just 8.4% of the total IPO proceeds of the year
Proceeds (` billion)
435 54
Average issue size reduced to `1.58 billion in 2011 from `6.39 billion in 2010 and `9.35 billion in 2009
185
159 12 62 7
CY 08
CY 09
CY 10
CY 11
Q1 Mar' 10
Q1 Mar' 11
Q1 Mar' 12
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SENSEX
15%
13%
13,212
Sensex ended the year down by almost 24% primarily due to exit of foreign investors
17,404
US debt ceiling crisis and eventual downgrade of US credit rating by S&P from AAA to AA+
11,671
Jan' 11
Apr' 11
Jul' 11
Oct' 11
Jan' 12
12%
5,900 23,436
FTSE
4%
5,768
20,556
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709
CY 07
CY 08 (530)
CY 09
CY 10
CY 11 (36)
Q1 Mar' 11 (31)
Q1 Mar' 12
133 70 88
Jan' 11
Jan' 12
Feb' 11 (38)
Feb' 12
Mar' 11
Mar' 12
(63)
* Only for Q1 2012 + Investment in Equity instruments
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Of the total amount mobilized through the primary market by corporate India, the top 10 issues raised over ` 44billion ( ~72% of total IPO proceeds in 2011)
Out of the 39 issues listed on the bourses, only 33.33% raised more than ` 1 billion
Only 9 issues out of 39 are trading above their offer price. This downward trend has seen about ` 40 billion of investors wealth being wiped out
Issue Size
(in ` million)
Sector Finance
Finance Finance
Return#
(on 30 Mar 2012)
12,450.0
9,012.5 7,500.0
(7.02%)
(27.74%) (15.00%)
Finance
Capital Goods Electrical Equipment Steel
4,332.8
2,270.0 2,174.1
26 - 28
256 - 261 117 - 120
28
256 117
(41.96%)
0.94% (6.07%)
SRS Ltd.
AcroPetal Technologies Ltd. C. Mahendra Exports Ltd. PG Electroplast Ltd.
Diversified
IT - Software Diamond, Gems and Jewellery Consumer Durables
2,030.0
1,700.0 1,650.0 1,206.5
58 - 65
88 - 90 95 - 110 190 - 210
58
90 110 210
(47.59%)
(84.67%) 23.64% (1.02%)
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REI*** 13.5%
Power 7% 10.8%
18%
9%
37%
13.5%
5%
41%
Energy & Power 17.6%
8%
9%
Industrial 10% 29.4%
Industrials 37.8%
4%
10% 4%
Steel
# Based on listings
15% 10% 3%
10%
BFSI+
Textiles
TMT*
Consumer Durables
Pharma
Realty
Power Generation
Capital Goods
Others
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Proceeds (2011)#
`62 billion
16%
REI*** 8.0%
11%
TMT** 4% 4.1%
9%
4%
11% 38%
Energy & Power
56% 5%
6% 11%
Steel
BFSI+
Mining
TMT*
Construction
Realty
Power Generation
Capital Goods
Others
Textiles
There were 69 IPOs issued in 2010 which together raised `434 billion With proceeds of `152billion, the Coal India issue was the biggest IPO of 2010 There were 39 IPOs issued in 2011 which together raised `62 billion Finance sector had 7 issues during the year which accounted for 56% of total funds raised With proceeds of `12.5 billion, L&T Finance was the biggest IPO of 2011
# On the basis of listings * Telecom, Media & Information Technology + Banking, Financial Services and Insurance
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DRHP* Filed
Volume
139 128
90 66 64
TMT** 17%
REI* 30%
CY 07 CY 08 CY 09 CY 10
10
Industrial 19%
CY 11
Q1 Mar' 12
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Sector
1,800.0
1,650.0 1,504.6 1,206.5 1,088.6 651.8
2.92
2.67 2.44 1.96 1.76 1.06
2
1 2 1 2 1
5.13
2.56 5.13 2.56 5.13 2.56
Construction
Entertainment Paper
600.0
600.0 600.0
0.97
0.97 0.97
1
1 1
2.56
2.56 2.56
Plastic
Cables Castings, Forgings & Fasteners Capital Goods ( Electrical Equipment Miscellaneous
600.0
558.8 369.0
0.97
0.91 0.6
1
1 1
2.56
2.56 2.56
320.0
2,017.0
5.19
3.27
2
4
5.13
10.26
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The year 2011 witnessed a downturn in IPO activity in the primary market as a result of the downward slide of the Euro zone, downgrading of the US credit rating and increased volatility in the secondary markets Eleven companies have already called off their IPOs in 2012 which includes prominent names like Micromax Mobiles and Pride Hotels The lukewarm response to the ONGC disinvestment program does not augur well for the government divestment program. However, the successful listing of the MCX IPO proves that there is still a demand for good issues with attractive valuation SEBIs+ action against seven Indian companies for malpractices during the IPO process as well as simplification of IPO norms in 2011
augurs well for retail investors and would enhance their participation in retail markets
The cut in repo rates will inject around `480 billion in the market. This may not translate into demand for new issues The net FII inflows of around `470 billion in the first three months of 2012 in the secondary market has contributed to the upsurge of the
SENSEX cheering investor sentiment. This could have a cascading effect on the primary market
Some of the interesting IPOs to watch out for in 2012 are Credit Analysis & Research (CARE ratings) and Just Dial. There could be FPOs of Oil India, SAIL,NALCO from the government to meet the divestment target of ` 300 billion
+ Securities and Exchanges Board of India
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APPENDIX
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Return
1,650.0
600.0
95 110
64 70
110
70
23.64%
(86.54%)
10-Feb-11 11-Feb-11
10-Mar-11 11-Mar-11 11-Mar-11 24-Mar-11 30-Mar-11 08-Apr-11 06-May-11 09-May-11 10-May-11 12-May-11 13-May-11 23-May-11 27-May-11 14-Jun-11 22-Jun-11
Chemicals Finance
IT - Software Textiles Chemicals Textiles Finance Cables Finance Packaging
793.8 296.0
1,700.0 699.8 294.8 932.8 4,332.8 558.8 9,012.5 458.3
95 98 70 84
88 90 72 77 60 72 195 205 26 28 65 69 160 175 32 35
98 74
90 77 70 205 28 69 175 35
(39.64%) (85.89%)
(84.67%) (13.77%) (24.36%) 74.71% (41.96%) (83.23%) (27.74%) (82.29%)
Finance
Paper
7,500
600.0
10 11
27 29
10
29
(15.00%)
(83.14%)
2,174.1
369.0 1,170.0 257.5 232.5
117 120
80 85 228 240 36 40 54 - 63
117
85 234 40 63
(6.07%)
(40.76%) 133.29% 122.25% (69.44%)
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Return
30th March 2012)
Company
Rushil Dcor Ltd. Readymade Steel India Ltd.
Sector
Miscellaneous Steel
Price Band
(`)
(on
406.4 347.5
63 - 72 90 - 108
186.67% (29.58%)
28-Jul-11 04-Aug-11
12-Aug-11 26-Aug-11
IT ( Software Finance
Finance
551.0 819.0
12,450.0 1,120.6
75 - 82 100 - 117
51 - 59 135 - 153
82 117
52 135
(91.88%) 152.65%
(7.02%) 57.19%
05-Sep-11
08-Sep-11 16-Sep-11
Pharmaceuticals
Capital Goods ( Electrical Equipment Diversified
630.0
2,270.0 2,030.0
90 - 100
256 - 261 58 - 65
100
256 58
(83.65%)
0.94% (47.59%)
26-Sep-11
04-Oct-11 07-Oct-11 14-Oct-11 17-Oct-11 19-Oct-11 19-Oct-11 20-Oct-11 24-Oct-11
PG Electroplast Ltd.
Prakash Constrowell Ltd. RDB Rasayans Ltd. Tijaria Polypipes Ltd. Onelife Capital Advisors Ltd. Flexituff International Ltd. Taksheel Solutions Ltd. M and B Switch. Vaswani Inds.
Consumer Durables
Construction Textiles Plastic products Finance Packaging IT ( Software
1,206.5
600.0 355.5 600.0 368.5 1,046.3 825.0 930.0 490.0
190 - 210
130 - 138 72 - 79 60 100 - 110 145 - 155 130 - 150 180 - 186 45 - 49
210
138 79 60 110 155 150 186 49
(1.02%)
(26.52%) (87.33%) (88.68%) 193.55% 52.29% (92.77%) (61.69%) (83.71%)
02-Nov-11
Finance
296.0
70 - 84
74
(85.89%)
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Sector: Cables
No.of IPOs Issue Size (` Million) % of total IPO proceeds
ARC
558.8
0.91
Company Name
Shilpi Cable Technologies Ltd.
IPO Grading 1
Subscription
3.48x
Listing Date
08 April 2011
Price (`)
(30 Mar12)
Return# (%)
11.57
(83.23)
IPO Grading 4 2
Subscription
Listing Date
Price (`)
(30 Mar12)
258.40 71.25
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369.0
0.6
Company Name
Sanghvi Forging & Engineering Ltd.
IPO Grading 3
Subscription
Listing Date
Price (`)
(30 Mar12)
Return# (%)
50.35
(40.76)
Sector: Chemicals
No.of IPOs 2 Issue Size (` Million) 1,088.6 % of total IPO proceeds 1.76
IPO Grading 3 2
Subscription
Listing Date
Price (`)
(30 Mar12)
59.15 52.95
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Sector: Construction
No.of IPOs Issue Size (` Million) % of total IPO proceeds
ARC
600.0
0.97
Company Name
Prakash Constrowell Ltd.
IPO Grading 2
Subscription
2.21x
Listing Date
04 October 2011
Price (`)
(30 Mar12)
Return# (%)
101.40
(26.52)
No.of IPOs 1
IPO Grading 3
Subscription
Listing Date
Price (`)
(30 Mar12)
207.85
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1,650.0
2.67
Company Name
C. Mahendra Exports Ltd.
IPO Grading 2
Subscription
Listing Date
Price (`)
(30 Mar12)
136.00
Sector: Diversified
No.of IPOs 1
IPO Grading 3
Subscription
Listing Date
Price (`)
(30 Mar12)
30.40
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Sector: BFSI
ARC
No.of IPOs 7
Company Name L & T Finance Holdings Muthoot Finance Ltd. Future Ventures India Ltd. PTC India Financial Services Ltd. Inventure Growth & Securities Ltd. OneLife Capital Advisors Ltd.
IPO Grading 5 4 3 4 2 1
Subscription
Listing Date
Price (`)
(30 Mar12)
5.34x 12 August 2011 24.55x 06 May 2011 1.52x 10 May 2011 1.70x 30 March 2011 4.58x 04 August 2011 1.53x 17 October 2011
74
296.0
10.44
(85.89)
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3,076.0
4.99
Company Name
AcroPetal Technologies Ltd. Taksheel Solutions Ltd. Bharatiya Global Infomedia Ltd.
IPO Grading 3 2 2
Subscription
Listing Date
Price (`)
(30 Mar12)
Sector: HealthCare
No.of IPOs Issue Size (` Million) % of total IPO proceeds
651.8
1.06
Company Name
Birla Pacific MedSpa Ltd.
IPO Grading 2
Subscription
Listing Date
Price (`)
(30 Mar12)
4.91
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Sector: Miscellaneous
No.of IPOs Issue Size (` Million) % of total IPO proceeds
ARC
2,017
3.27
Company Name
IPO Grading
3 2 1
Subscription
Listing Date
Price (`)
(30 Mar12)
Tree House Education & Accessories Ltd. Rushil Dcor Ltd. VMS industries Ltd. Timbor Home Ltd.
63
19.25
Sector: Entertainment
No.of IPOs Issue Size (` Million) % of total IPO proceeds
600.0
0.97
Company Name
MidValley Entertainment Ltd.
IPO Grading
1
Subscription
Listing Date
Price (`)
(30 Mar12)
9.42
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Sector: Textiles
No.of IPOs Issue Size (` Million) % of total IPO proceeds
ARC
2,348.1
Issue Price (`) 205 77 30 79
3.81
Company Name
IPO Grading
3 1 2 2
Subscription
Listing Date
Price (`)
(30 Mar12)
Return# (%)
74.71 (13.77) (12.50) (87.33)
Lovable Lingeries Ltd Sudar Garments Ltd. Shekhawati Poly-Yarn Ltd. RDB Rasayans Ltd.
35.21x 24 March 2011 1.55x 11 March 2011 10.40x 12 January 2011 1.50x 07 October 2011
Sector: Plastic
No.of IPOs Issue Size (` Million) % of total IPO proceeds
600
0.97
Company Name
Tijaria PolyPipes Ltd.
IPO Grading 2
Subscription
Listing Date
Price (`)
(30 Mar12)
6.79
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Sector: Steel
No.of IPOs Issue Size (` Million) % of total IPO proceeds
ARC
3,011.6
Issue Price (`) 117 49 108
4.88
Company Name
IPO Grading
3 2 2
Subscription
Listing Date
Price (`)
(30 Mar12)
Return# (%)
(6.07) (83.71) (29.58)
Innoventive Industries Ltd. Vaswani Industries Ltd. ReadyMade Steel India Ltd.
Sector: Pharmaceuticals
No.of IPOs 2 Issue Size (` Million) 1,800.0 % of total IPO proceeds 2.92
IPO Grading 1 2
Subscription
Listing Date
Price (`)
(30 Mar12)
545.90 16.35
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Sector: Packaging
No. of IPOs Issue Size (` Million) % of total IPO proceeds
ARC
1,504.6
2.44
Company Name
Flexituff International Ltd. Paramount Printpackaging Ltd.
IPO Grading
3 2
Subscription
Listing Date
Price (`)
(30 Mar12)
236.05 6.20
Sector: Paper
No. of IPOs 1 Issue Size (` Million) 600.0 % of total IPO proceeds 0.97
IPO Grading
2
Subscription
Listing Date
Price (`)
(30 Mar12)
29
4.89
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Thank You
CA. Tapan Jindal
tapan@arc-fs.com +91 11 6542 2128
Aniket Kulkarni
info@arc-fs.com +91 11 4562 2128
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