Since the economic turmoil of 2008-09, the primary market has taken a knock. The current level of the BSE-IPO index is same as that of January 2005, outlining the struggling performance by the IPOs (Initial Public Offers). Since 2009, 112 companies have cumulatively lost Rs 2,63,554 crore of market capitalisation after launching their IPOs or FPOs (Follow-on Public Offers), which is equivalent to market cap of bottom 225 companies of BSE-500 companies.
However QIPs (Qualified Institutional Placements) are in no better shape either, if one goes by the performance of the past 5 years. QIPs allow Indian-listed companies to raise capital from its domestic markets without submitting any pre-issue filings to market regulators.
Like IPOs, equity issued to institutions is also lagging far behind the overall market. Out of the 152 QIPs rolled out in the past 5 years, only 30 have beaten the Sensex return. Not just that, more than 80 per cent those have underperformed the broad index.
Although the market is at the same level that was witnessed in 2007 and 2010, the number of QIPs and aggregate amount raised has not picked up pace. This indicates that even institutional investors are not sure of the direction markets will take.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
