Ray of hope for old economy IPOs - Prime

NEW DELHI, JAN. 21. The year 2001 is likely to witness a revival for old economy initial public offers (IPOs), a marked shift from domination of the ICE (information, communication and entertainment) sector over the last two years in the secondary and primary markets, leading data base on primary capital, Prime said here.

According to Prime, in 1999-2000, of the total 52 initial public offers (IPOs), 37 or over 71 per cent were form the ICE sector (35 from IT and two from media).

Continuing the trend, in the first nine months of the current fiscal, of the 103 IPOs, 92 or over 89 per cent have been from the ICE sector (77 from IT, 12 from media and three from telecom).

Prime said the IPOs from traditional manufacturing sector have ever since 1995 taken a beating in the secondary market, partly due to the excesses committed in the early Nineties and partly because of this sector itself being in severe crisis due to overcapacity, inefficient technologies, declining demand and high financial costs.

Some of the interesting non-ICE issues in pipeline are from a pizza chain (Domino's), mosquito repellent firm (Godrej Sara Lee), printing presses (Repro and Thomson), resort (Averina International Resorts), paint manufacturer (Jenson & Nicholson) and petrochem project (South Asian Petrochem).

Others in pipeline include courier companies (Blazeflash and Elbee), beauty centre (Curls & Curves), travel agency (Kuoni), consumer electronics (LG), polymers (Pushpa Polymers), meters (Secure Meters), departmental store (Shopper's Stop) and packaging (Time Packaging), Prime said.

Pharma hopefuls, according to Prime, include Paras Pharmaceuticals, Indo French Laboratories, Divi's Laboratories, Eros Pharma, Natco Pharma, Neuland and Indo-Euro Pharma.

Also in the offing are IPOs from the biotech sector - Shanta Biotechnics, Nectar Biotech, Maanya Biotech, Biogen Biotechnologies, Indfrag Biosciences and Micro Labs.Though all new general private sector banks have already gone public, there are a large number of public sector banks which are still to tap the capital market, Prime said.``The dictates of capital adequacy ratio, coupled with the government's directives that such banks should fend for themselves for their capital requirements, will witness several banking IPOs," it said.According to Prime, while Andhra Bank should be entering the capital market soon, others in the line are Allahabad Bank, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporaiton Bank, Punjab and Sind Bank, Punjab National Bank, Union Bank of India, United Bank of India and some of the SBI subsidiaries.

Some old-generation private banks such as Lord Krishna Bank, Nainital Bank, Nedungadi Bank and United Western Bank have also announced capital raising plans, it said adding Centurion Bank should shortly be hitting the market with a Rs. 129 crore rights issue.

Issues could also be expected from some housing finance companies, among them being Andhra Bank Housing Finance, BoB Housing Finance, PNB Housing Finance, Saya Housing Finance and SBI Home Finance, it added.

Significantly missing would be the core infrastructure sector, be it roads, ports or power, Prime said. ``Surely though, the ICE sector would continue to play a significant role in the new year also," it said.

- PTI

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