Dry Spell in IPO Market

MUMBAI -- The stock markets are in an unchartered territory and IPOs have all but dried up. More so, after S and amp;P downgraded the US ratings. This uncertainty in the equity markets is leading to a rise in alternative fund raising options such as structured transactions, debt offerings, strategic exits and inter se transfers between private equity funds. Also, as borrowing from banks becomes tougher with every rate hike by the Reserve Bank of India, foreign debt in the form of external commercial borrowings (ECBs), debenture offers to retail investors and corporate fixed deposit schemes are emerging as the preferred mode of fund raising for India Inc. A select few are, however, still looking at listing on a foreign bourse. And as it happens in times of tough choices, there are some smart finance brains who are selling smarter fund raising routes that can give investor-lenders very high returns without falling on the wrong side of the law. Consider this. Between January and July 2010, nearly Rs 32,700 crore was raised from 35 issues. Compared to this, in the same period of 2011, a little over Rs 12,200 crore has been raised from 25 offerings -a drop of over 60%.