Fund managers looks introducing new NFOs

The domestic stock market is likely to continue its record-breaking journey with expectations of a robust response to the two public issues hitting the market today, strengthening the already upbeat investor sentiment.  To raise about Rs 1,000 crore each, two companies – real estate developer Parsvnath and infrastructure provider Lanco Infratech – have launched initial public offerings (IPOs) today.  

Analysts expect the underlying expectations of a strong investor response to both the issues to further boost market sentiments, which are already riding high on the back of impressive second-quarter corporate results and resumption of a record-breaking rally that has seen the benchmark Sensex crossing the 13,100 level.  The Sensex – the market barometer – gained 223.98 points last week to settle at an all-time high of 13130.79.  

The Parsvnath issue will also open the doors to foreign institutional investors (FIIs) in the real estate IPO segment, and analysts are anticipating impressive response from overseas investors.  “The real estate sector has assumed a growing importance with the liberalisation of the economy. The robust demand scenario is driven by factors such as government policies, rising disposable incomes and exponential growth in certain industries like retail, IT/ITeS, entertainment and tourism,” domestic brokerage firm Sharekhan said in a report.

  Parsvnath Developers is offering 3.32 crore equity shares in a price band of Rs 250-300 per share.  Hyderabad-based Lanco Infratech is also planning to raise up to Rs 1,060 crore with an issue size of 4.44 crore equity shares in a price band of Rs 200-240 per share.  Lanco, which plans to raise power generation capacity about seven-fold to 3,800 mw in the next five years, is also developing a 100-acre integrated IT park and township in Hyderabad at an investment of about Rs 3,600 crore.  The impressive response generated by the IPO of Info Edge India, owner of job portal Naukri.com and matrimony website Jeevansathi.com, is also likely to enthuse investors.  Info Edge IPO, which closed on Friday, was oversubscribed more than 55 times and received overwhelming FII response.  

Strong buying momentum acquired by FIIs in the country’s equity market over the recent past has further raised expectations for continued uptrend on the bourses.  In October, FIIs were net buyers for shares worth more than Rs 8,000 crore, against their net inflows of Rs 5,425 crore in September and Rs 4,643 crore in August 2006.  In just three days in November, FIIs have already purchased shares worth Rs 831.4 crore from the equity markets.  Analysts believe that the Sensex would see new peaks in the days to come as FIIs are on a buying spree. The market could extend its rally with stable crude oil prices providing another support pillar, they said.  The recent economic data showing impressive growth in the infrastructure sector, which grew 9.9 per cent in September, has further raised the prospects for the two new IPOs, analysts said.

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