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BW Businessworld

Few Takers For Public Offers

There has been much talk about the revival of the IPO market, but investor participation on the bourses remains lacklustre.

There has been much talk about the revival of the IPO market, but investor participation on the bourses remains lacklustre. No doubt a lot of companies have tapped the capital market with their public issuances, but they have failed to lure participants thanks to expensive valuations and volatility in the secondary markets. Almost all IPOs that hit the market in March such as Bharat Wire Ropes, Healthcare Global and Infibeam barely managed to get oversubscribed. And mind you, this is despite companies like Infibeam spending heavily on advertising — the Rs 450-crore IPO from the e-commerce firm was oversubscribed only 1.11 times. On the other hand, Bharat Wires Rope was oversubscribed just 1.21 times, and Healthcare Global 1.56 times. If the current situation is any indicator of future trends, valuations definitely need correction — only then will the IPO market heat up again!
— Paramita Chatterjee

Cleaning Up The Act
One would think that non-performing assets will rise as banks aggressively provide for bad loans to clean up their books. But Mint Road sees it differently. “After a comprehensive asset quality review, banks have initiated the process of cleaning up balance sheets by end-March 2017. While this may lead to a short-term impact on profitability of some of the state-run banks, it would enable a healthy flow of credit to the system in the long run,” noted Harun R. Khan, deputy governor, RBI. Then, there are efforts to recapitalise these banks and ensure better governance through the Banks’ Board Bureau. On the borrower side, moves by India Inc. to exit non-core businesses, equity infusion and better governance will aid the economic turnaround. What’s worrisome is the fall in exports for a prolonged period, though the current account deficit is lower at 1.4 per cent of GDP (Q2, fiscal 2016). On balance, we seem to be in a sweet spot.
— Raghu Mohan

Arrest Mallya First…
A whole industry of jokes seems to have sprung up with Vijay Mallya’s hasty exit from India, taking with him the knowledge of how he will ever pay the Rs 9,000 core he owes to banks, if at all. And none are more aware that the bigger the crime the greater the escape than the common man. Or in this case, the common woman... A traveler on a Mumbai train was caught without a Rs 10 ticket and the ticket collector fined her Rs 260. Audaciously and perhaps justifiably as the fine was steep relative to the purchased ticket, the woman marched up to the station master’s office. And demanded to know why he didn’t arrest Mallya, the bigger defaulter surely. Hilarious as the incident is, it does have a serious undertone as more and more Indians are asking themselves how the rich and the famous get away with crimes that easily.
— Mala Bhargava

Thinking Small

In a special in-between event on March 21, Apple released a new iPhone, called the iPhone SE, and a smaller 9.7-inch iPad Pro. These are meant to be affordable for emerging countries. An error with communicating the price put the base model of the 16GB iPhone SE at Rs 30,000 corrected to Rs 39,000 with the result that the much-loved gadget is not really in an affordable range after all. “Rs 39,000 for a 4-inch phone is too much,” said one disappointed buyer, venting on social media. “Why this Cupertino-based company doesn’t want to become the Apple of India’s eye is a 1.3 billion people question,” says another. iPhone sales have been surging on a small base and Apple has overtaken Chinese phone maker Xiaomi in Q4 2015. An estimated 108 million units were sold in 2015 and over 300 million are expected to be sold over the next two years. Sales are reaching saturation point in the US, China and Europe; India is yet untapped.
— Mala Bhargava

Fortune Ignores Modi
Fortune magazine’s list of ‘World’s 50 Greatest Leaders’ has only one Indian — Arvind Kejriwal — at 42nd position. He is credited with reducing pollution in Delhi with his even-odd vehicle scheme, and pushing it through in the face of widespread scepticism. Fortune’s choice that spans the spheres of business, government, and social activism is based on who is most “transforming the world and inspiring others to do the same”. Jeff Bezos, the very visible Amazon CEO, is on the top. But there is a notable miss: India’s prime minister. The exclusion of Narendra Modi must have ruffled quite a few feathers considering the PM has constantly pitched the India story abroad; and even spent an estimated 185 calendar days last year touring the world. Perhaps, contentious issues such as ‘rising intolerance’ and ‘threats to minorities’ have overshadowed the good the PM stands for.
— Gurbir Singh

BW Wins Award For Excellence
BW Businessworld won an award for excellence and innovation at the recently-held “Academia Awards” of the New Delhi Institute of Management (NDIM) business school. Chairman and Editor-in-Chief Anurag Batra received the award on behalf of BW Businessworld Group. NDIM said the awards recognised the organisations that have built India’s credibility in any sphere over a period of time and have excelled in different fields. The awardees were chosen through extensive research by more than 800 MBA students, 74 members of faculty and 201 industrial houses. The “Business Excellence and Innovative Best Practices-Academia Awards — 2016” ceremony was held at the Jawaharlal Nehru Stadium auditorium and attracted 2,100 people, including mediapersons, bureaucrats and students.

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magazine 18 april 2016 ipo market europe china vijay mallya