Three IPOs to test wary market HealthCare Global, TeamLease Services and SSIPL Retail look to raise a collective 1,400 cr through IPOs
Three companies will likely hit the market this month with initial public offerings (IPOs) that will test the nerves of investors, on edge becaof the contagion effect from China.
Cancer care specialist HealthCare Global Enterprises Ltd (HCG), staffing services firm TeamLease Services Ltd, and footwear manufacturer and retailer SSIPL Retail Ltd will seek to raise a collective ` 1,400 crore through the IPOs, bankers familiar with the plans said.
The IPOs will serve as a litmus test of investor appetite in a month that has started on a tumultuous note, with the BSE Sensex losing about 1,000 points, or 4.5%, in the first week.
Global markets were shaken as China pegged the yuan lower for eight days in a row, sparking concerns about the outlook for the Chinese economy and prompting fears of competitive devaluation by other countries.
On Friday,the Sensex gained 0.33% to 24,934.33 points, helping pare the loss, as China’s central bank moved to stabilize the yuan.
“Any company which is looking to enter the market at this time will have to be a fundamentally strong company, with good track record and will have to offer reasonable valuation,†said Prithvi Haldea, chairman of Prime Database, which tracks primary markets.
Valuations in a volatile environment are likely to be lower than in a bull market, and that may make the IPOs more attractive for the investors, he added.
“Most of the IPOs in the pipeline are small in size, around ` 500-800 crore, and they will not need too much support from foreign institutional investors who have been pulling out money from the markets,†Haldea said.
The three issues in the first month of 2016 are coming on the heels of a long line of IPOs that hit the market in 2015. Last year, the IPO market saw 21 firms raising a collective ` 13,600 crore, according to data from Prime Database. This was the highest amount raised since 2010.
HCG is looking to raise around ` 600-700 crore through its IPO and is likely to be the largest issue this month.
“While the company and its bankers are targeting end of January for the launch, they are still in discussions with investors, trying to assess the institutional demand before firming up the
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