Amid the ongoing IPO rush in India, with the current year 2017 on the way to becoming the best year yet for companies to raise funds in the primary markets, several state-run firms in defence, railways and insurance sectors are also queuing up to soon get listed on the stock exchanges.
Several PSUs (public sector undertakings) are in the process of listing, disinvestment secretary Neeraj Kumar Gupta said on Wednesday. PSUs from defence, railways and insurance sector will soon enter the market, Neeraj Kumar Gupta, Secretary, Department of Investment and Public Asset Management said.
IPOs in India at all-time high
IPO fundraising in India is likely to touch an all-time high this year, capital market regulator SEBI Chairman Ajay Tyagi said earlier today, adding that India remains a bright spot amongst the major economies. Earlier last month, a Bloomberg news report had quoted ICICI Securities’ Investment Banking Head Ajay Saraf as saying that total fundraising via IPOs could rise to Rs 50,000 crore this year. The previous record is Rs 36,300 crore worth of IPO money raised in the year 2010.
The current year 2017 has seen over 17 IPOs so far, including high profile ones such as that of BSE Ltd — the first stock exchange to get listed in India — HUDCO, Cochin Shipyard, CDSL, D-Mart, among others, together raising over Rs 12,000 crore. In the current month September alone, as many as four companies have lined up their IPOs to raise over Rs 2,500 crore put together. Bharat Road Networks Ltd’s IPO for raising about Rs 600 crore; and Dixon Technologies’ IPO, also of the same amount, opened today for subscription.
Defence, Railways, Insurance
Earlier last month, in a major boost to the Narendra Modi administration’s disinvestment drive to sell equity stakes in profitable PSUs to raise funds, the government kickstarted the process to sell up to 25% of its equity stakes in four state-run defence companies via IPOs. The government is looking to sell stakes in Mazagon Dock Ltd, Bharat Dynamics Ltd, Garden Reach Shipbuilders & Engineers Ltd and Mishra Dhatu Nigam Ltd.
Going further, five insurance companies are expected to collectively raise up to Rs 40,000 crore before the end of 2017, with three of those being from the public sector. These companies are HDFC Standard Life Insurance, ICICI Lombard General Insurance Company, and the three state-run firms New India Assurance, GIC of India and SBI Life Insurance Company.
As for railways, the government seeks to sell 10% equity stake each in three major state-run railway companies IRCTC, Ircon and IRFC via IPOs in the current financial year 2017-18. The Ministry of Railways has listed a total of nine units for likely IPO.