Emerging markets respond better to IPOs: report

By siliconindia   |   Friday, 22 May 2009, 23:29 IST
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Emerging markets respond better to IPOs: report
Bangalore: Of the 20 largest global IPOs issues in 2008, 15 were by the companies in the emerging market, which include the stock sale of Reliance Power as the single Indian offering, states a report from the global IPO consultancy major Ernst & Young. As per the report, "In 2008, out of the 15 IPOs issued in the emerging markets, four each were from China and Saudi Arabia." Of the top five IPOs, four are from emerging market economies including Brazil, China, India and Soudi Arabia. The $19.7 billion Visa IPO from the U.S. was the largest IPO of the year 2008 and the biggest ever in the history of U.S. on the NYSE, which represented 21 percent of total capital raised globally. The second largest IPO was the $5.7 billion offering of China Railway Construction and the third largest was Brazil's $4.1 billion IPO of oil and gas company OGX and fourth in the list was India's Reliance Power, which had raised Rs 11,560 crore in the largest IPO on the Indian capital market, added the report. Though there was a significant decline in IPO volumes in the world, emerging markets were responsible for the growth in the primary market segment. "In 2008, the BRIC countries together hosted 163 deals worth $28 billion, a 62 percent drop in deal numbers and a 76 percent decline in funds raised from 2007," Ernst & Young said. The Emerging market companies, especially the oil and commodities, issued seven out of 10 largest IPOs, which includes one from the Czech Republic and two each from Russia and Poland. Sector wise analysis reveals that the real estate, healthcare and technology IPOs suffered 90 percent decline on an average, where as the financial, energy and power and materials sectors raised the highest IPO capital.