Greetings once again. Apologies that I was away for some time but it was festival season in India and it is the best time to invest in yourself and your family.
Hmm...talking about investments!! For last few years, Indian stock markets have seen blitzkrieg. If we just go by 2006's data, India had the 8th largest volume of IPOs in the world with Indian companies raising US$ 7.23 billion in the domestic stock markets. 2007 data is yet to be released but it's anybody guess that 2007 will be bigger and better than the previous one. As per NSE website, in 2006, 73 companies raise funds through primary market by launching the IPOs and in 2007, 86 companies have already raised funds and we still have one full month to go.
Raising money is good for business growth, expansion and diversification. But in recent past, it seems to me that some IPOs are being filed just to raise money for the promoters and the primary stakeholders. It seems to be easiest route to take some portion of the company to the public, dilute the promoter's stake and in result, hefty cash flows in to the promoter's bank accounts. FIIs, Corporates and even retail investors have such a frenzy over the recent IPOs that companies have been asking for higher valuations and still the issues are getting subscribed 30+ times.
One of the classic example seems to be much touted Reliance Power IPO from ADAG group. Their company Reliance Energy is already bidding for good number of projects, sitting pretty on investments by retail, FII and DII investors, holding on to huge cash reserves of Rs 9000 crore. God knows why they wish to rush to stock markets once again to raise Rs 2 billion so early. They could raise this money later as well when they will have visibility into their UMPP projects, which seems to be sole motive of Reliance Power. I really don't know what is it that they can't do within Reliance Energy that they want to create another arm Reliance Power when the UMPP leg hasn't even started their operations. Typically, a company creates separate arm when the arm has done enough and calls to be a separate entity. Now a days, companies live 2-3 years ahead in future.
Whatever, IPO market remains hot. Frenzy will continue to be seen among all kind of investors for all kind of IPOs. Keep raising chunks for yourself and help few Indians to feature on the "Forbe's Richest people in World" list.
~ Navjot Singh Sohanpal
PS - I will be investing in BGR Energy even though asking price seems beyond valuations ;-)
Hmm...talking about investments!! For last few years, Indian stock markets have seen blitzkrieg. If we just go by 2006's data, India had the 8th largest volume of IPOs in the world with Indian companies raising US$ 7.23 billion in the domestic stock markets. 2007 data is yet to be released but it's anybody guess that 2007 will be bigger and better than the previous one. As per NSE website, in 2006, 73 companies raise funds through primary market by launching the IPOs and in 2007, 86 companies have already raised funds and we still have one full month to go.
Raising money is good for business growth, expansion and diversification. But in recent past, it seems to me that some IPOs are being filed just to raise money for the promoters and the primary stakeholders. It seems to be easiest route to take some portion of the company to the public, dilute the promoter's stake and in result, hefty cash flows in to the promoter's bank accounts. FIIs, Corporates and even retail investors have such a frenzy over the recent IPOs that companies have been asking for higher valuations and still the issues are getting subscribed 30+ times.
One of the classic example seems to be much touted Reliance Power IPO from ADAG group. Their company Reliance Energy is already bidding for good number of projects, sitting pretty on investments by retail, FII and DII investors, holding on to huge cash reserves of Rs 9000 crore. God knows why they wish to rush to stock markets once again to raise Rs 2 billion so early. They could raise this money later as well when they will have visibility into their UMPP projects, which seems to be sole motive of Reliance Power. I really don't know what is it that they can't do within Reliance Energy that they want to create another arm Reliance Power when the UMPP leg hasn't even started their operations. Typically, a company creates separate arm when the arm has done enough and calls to be a separate entity. Now a days, companies live 2-3 years ahead in future.
Whatever, IPO market remains hot. Frenzy will continue to be seen among all kind of investors for all kind of IPOs. Keep raising chunks for yourself and help few Indians to feature on the "Forbe's Richest people in World" list.
~ Navjot Singh Sohanpal
PS - I will be investing in BGR Energy even though asking price seems beyond valuations ;-)
No comments:
Post a Comment