PSUs Dominated Fund Raising in 2013

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Despite large psus deferring their offerings, Indian companies managed to raise 25 percent more funds through the public equity markets in 2013 as compared to 2012. According to Prime Database, companies raised Rs 45,372 crore in 2013.

Most of the fund raising was through Offers for Sale (OFS) through the stock exchanges, the new secondary sale method allowed by Sebi to help promoters of listed companies comply with the minimum public shareholding requirements.

For investors, these sales are substantially risk-free as these are at a discount to the market price. But proceeds from such sales go to the selling shareholders. Another instrument allowed by Sebi, Institutional Placement Programme (IPP), for the same purpose saw 12 companies raising Rs 4,823 crore.

PSUs dominated the year by raising Rs 25,354 crore, or 56 percent of the total. In 2012, they had raised Rs 19,679 crore. Prime Database Managing Director Pranav Haldea says the unstable political and economic climate in  the country, coupled with a volatile secondary market, has resulted in a lull in IPOs.