Covid-19 hits IPO filings\, only 11 offer documents filed with Sebi this yr

Covid-19 hits IPO filings, only 11 offer documents filed with Sebi this yr

Market players said the lockdown and social distancing norms had made it difficult for companies, investment bankers and legal firms to do the paper work for IPO filings

Topics
Coronavirus | ipo filing | Sebi

Sundar Sethuraman  |  Thiruvananthapuram 

IPO market
Companies are also worried about the investor concerns regarding the impact of the Covid-19 pandemic on their businesses.

The pandemic has been a dampener for IPO (initial public offering) aspirants. So far this year, only 11 companies have filed their draft offer document with the Securities and Exchange Board of India (Sebi), down from 27 last year.

Add to that, the economic shock created by the pandemic has worsened the profit and loss accounts of many companies, which is acting as a deterrent.

“When the economy is not doing that well, you do not need that much of growth capital. Quite a few sectors have been badly hit. Even those companies which want to do purely secondary sales will find merit in waiting if their sectors are badly impacted due to the pandemic,” said V Jayasankar, head of equity capital markets, Kotak Investment Banking.

“Companies will have to file with the last audited results. And the minute you file that, people will start guessing the valuation. Why would anybody file with bad numbers? At the best, sales are stagnant, and in such a situation, you will not get your expected valuation from the market,” said Rajendra Naik, managing director (investment banking), Centrum Capital, adding that many IPO-bound companies did not have good growth last year either.

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Companies are worried about investor concerns regarding the impact of the pandemic on their businesses.

“When one does an IPO, one has to tell the story completely to explain why things are harsh now, and the prospects. Hence IPO-bound companies may wait a little longer when the economy is not doing well,” said Jayasankar.

Skanda Jayaraman, managing director (investment banking), Spark Capital, said companies would require a lot of data to assess the situation.

“Most people do not have the data now,” added Jayaraman. Bankers said IPO filings were a lengthy and tedious process. Doubts over sustainability in a secondary market rally make it difficult for companies to time the IPO, according to them.

“The markets have risen because of surplus liquidity. And this is a global phenomenon. Doing an IPO is one thing; after the IPO, the company needs price support and for that you need long-term money that will support it if the economy goes down. The fear most people have is you can do an IPO, but six months down the line, if the markets decide to catch up with the economy and correct, there is fear of their stocks tumbling,” said Jayaraman.

Typically, there is a rush in filing in September because companies can file their prospects based on their March numbers. Filings that take place after September have to disclose their June-quarter numbers.

As the June quarter is when most companies see the maximum disruption, the IPO filing slump could continue. Experts said only companies which could demonstrate they had emerged stronger from the Covid-19 pandemic could muster the courage to file their IPO documents now.
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First Published: Tue, September 15 2020. 18:54 IST
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Covid-19 hits IPO filings\, only 11 offer documents filed with Sebi this yr

Bournemouth Beats Crystal Palace 11-10 On Penalties In Cup

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Bournemouth Beats Crystal Palace 11-10 On Penalties In Cup

Newcastle's Ryan Fraser celebrates after scoring his side's opening goal during the English League Cup soccer match between Newcastle United and Blackburn Rovers at St. James' Park in Newcastle, England, Tuesday, Sept. 15, 2020. (Lee Smith/Pool via AP)

Newcastle's Ryan Fraser celebrates after scoring his side's opening goal during the English League Cup soccer match between Newcastle United and Blackburn Rovers at St. James' Park in Newcastle, England, Tuesday, Sept. 15, 2020. (Lee Smith/Pool via AP)

Bournemouth beat Crystal Palace 1110 in an unusually long penalty shootout to advance to the third round of the English League Cup after the game ended at 00 after 90 minutes on Tuesday.

  • Last Updated: September 16, 2020, 3:03 AM IST

LONDON: Bournemouth beat Crystal Palace 11-10 in an unusually long penalty shootout to advance to the third round of the English League Cup after the game ended at 0-0 after 90 minutes on Tuesday.

As the sides remained deadlocked after five penalties each, even both goalkeepers had to take spot kicks and they both missed.

Eventually David Brooks scored his second penalty for Bournemouth and Luka Milivojevics second was saved by goalkeeper Asmir Begovic to knock out the Premier League side.

Bournemouth, which was relegated from the Premier League in July, plays Manchester City in the next round.

GREALISH DELIGHT

Jack Grealish celebrated his new contract at Aston Villa by scoring the decisive goal in a 3-1 victory over Burton.

The match looked to be heading for a penalty shootout after Ollie Watkins had scored Villas equalizer late in the first half to cancel out Colin Daniels opener for the third-division team after only 68 seconds.

But Grealish struck a volley from the edge of the area to put Dean Smiths team in front in the 88th minute.

Keinan Davis made sure of the victory in stoppage time to set up a trip to Bristol City or Northampton in the next round.

HALLER DOUBLE

Sebastien Haller scored twice in four first-half minutes before Felipe Anderson added a late third as West Ham advanced past Charlton 3-0.

The win may only temporarily paper over the cracks after West Hams poor start to the season a 2-0 home loss to Newcastle on Saturday as well as unrest off the field.

DEBUT GOAL

Ryan Fraser secured Newcastle’s 1-0 victory over Blackburn by scoring on his first appearance for the northeast club, which will play fourth-tier side Morecambe in the third round.

___

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