JOHN: The other side of the coin which is the government divestment – for FY16 the target is a shade under Rs 70,000 crore, which is the highest ever. Would there be appetite for that as well?
A: Certainly yes. Ultimately the government will make the decision when they would like to time these divestments. If you look at the Coal India transaction, it is highly successful transaction because the government activated the entire process in a matter of two days. I do not think anyone in the market knew about it. They did end up raising between Rs 22,000 crore-23,000 crore.
There is a fairly strong response from the institutional side even retail participants enthusiastically bring in about Rs 2,000 crore. Therefore, for high quality companies like Coal India, Oil and Natural Gas Corporation (ONGC), Oil India and others depending upon the companies that government is targeting, there is certainly enough appetite in the Indian market.
michael : Can you give us a sense of what the qualified institutional placement (QIP) pipeline is right now and how much do you think the equity transactions could totally raise – public sector undertaking (PSUs) as well the private sector companies could raise in FY16 via secondary market transactions?
A: Last year the amount of money raised through QIPs and follow-on was about Rs 27,000 crore, referring to the current fiscal year. In our estimate this number can move between Rs 50,000 crore and Rs 60,000 crore and the way I look at the break up is probably the public sector banks will do about Rs 25,000 crore and private sector will do about Rs 35000 crore and as a result you therefore may have a very robust QIP market in the next fiscal year.
A: Certainly yes. Ultimately the government will make the decision when they would like to time these divestments. If you look at the Coal India transaction, it is highly successful transaction because the government activated the entire process in a matter of two days. I do not think anyone in the market knew about it. They did end up raising between Rs 22,000 crore-23,000 crore.
There is a fairly strong response from the institutional side even retail participants enthusiastically bring in about Rs 2,000 crore. Therefore, for high quality companies like Coal India, Oil and Natural Gas Corporation (ONGC), Oil India and others depending upon the companies that government is targeting, there is certainly enough appetite in the Indian market.
michael : Can you give us a sense of what the qualified institutional placement (QIP) pipeline is right now and how much do you think the equity transactions could totally raise – public sector undertaking (PSUs) as well the private sector companies could raise in FY16 via secondary market transactions?
A: Last year the amount of money raised through QIPs and follow-on was about Rs 27,000 crore, referring to the current fiscal year. In our estimate this number can move between Rs 50,000 crore and Rs 60,000 crore and the way I look at the break up is probably the public sector banks will do about Rs 25,000 crore and private sector will do about Rs 35000 crore and as a result you therefore may have a very robust QIP market in the next fiscal year.
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