There is a thriving market for public issues. The instruments commonly offered are equity, debentures, and a variety of convertibles including debentures bundled with warrants. Public issues are made by both private and public sector companies. Of the 130 issues per month taking place around now, roughly 70 are IPOs; this is one of the highest in the world. Unlike many other countries where issues are privately placed, public issues in India are directly marketed to retail investors all over the country.
Excluding public issues by the public sector, we have the following time-series of resources raised from the primary market.
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Year Equity Debentures Total Share in Net Savings
(Rs.bln) (Rs.bln) (Rs.bln) (%)
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1984 2.5 6.6 9.1 4.6
1985 2.5 6.1 8.6 4.3
1986 9.0 8.4 17.4 7.5
1987 10.1 15.6 25.6 9.4
1988 11.1 6.7 17.8 4.8
1989 10.4 21.9 32.2 6.9
1990 12.3 52.8 65.1 10.1
1991 13.0 30.1 43.1 5.9
1992 17.3 40.0 57.6 6.9
1993 99.8 98.4 198.3 21.7
1994 103.4 97.5 201.0
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In recent years, Euro issues of GDRs and ECBs by Indian companies have taken place on a large scale.
In new guidelines announced on 26th May 1995, RBI has allowed for foreign investment in several service sectors, the implication for the capital market is that companies in the finance and leasing sector can issue shares and securities to non-resident Indians and overseas corporate bodies on a repatriable basis. Hitherto, such an allotment was possible only with prior permissin from the RBI.
Centre for Monitoring Indian Economy, Bombay
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Last updated: August 1995.