Calendar year 2010 and financial year 2010-11 has seen bunching of IPO’s and then for some time absolutely none. Let us take the example of April where in the last few days of the month we had an IPO opening every single day and then for almost three weeks not an issue. At that time it was the new SEBI guidelines where QIB’s would have to pay 100% against the earlier 10% as bid amount which made companies vary as what would be the response. Secondly the allotment time was also cut down by approximately 10 days.

We have had in the month of May just one issue which was India’s first IDR issue from Standard Chartered Bank PLC. This issue closed on the 28th of May and would be listed on the 11th of June. After Standard Chartered Bank issue there is one small issue from Fat Pipes Limited which plans to raise Rs 49 crs. The issue opens on the 7th of June and closes on 9th of June. After this issue there are many issues which have received clearances and are awaiting favourable market conditions to open the issues. The last few weeks have seen global markets on a roller coaster ride and there have been concerns ranging from Greece to Spain, to the future of the weakening euro, the economic recovery slipping back and so on. What this has done to the Indian markets is that we have seen FII’s pull out over 2.5 billion dollars in the current fall. The BSESENSEX has fallen in trading sessions from a level of 17826 to a low of 15960, a fall of 1866 points in 21 trading sessions. The recovery has been extremely swift and the markets have recovered 903 points to 16863 in mere three sessions. This fall and recovery have made the markets lose their momentum and any future recovery will bring profit taking accompanied with selling pressure.

Coming to IPO’s a number of companies have completed their overseas pre-marketing road shows and have received good response. FII’s have said they like the company and would look at investing when time is favourable. In such a scenario most IPO bound companies are playing the wait and watch game.

In terms of performance post listing, the number of issues which trade at a discount to issue price are far greater in number than those trading at a premium. In such a scenario it is more than natural to find that there is hardly an IPO activity in the market place.

Let’s keep our fingers crossed and hope that all is well.