15 IPOs axed at the last minute since January 2011

Market experts believe many companies were averse to hitting the market because of the subdued market conditions, as well as the fact that firms that did implement their public stake sale plans are trading below the issue price

As many as 15 companies, including Anil Ambani Group’s Reliance Infratel, have refrained from bringing out their IPOs so far this year despite obtaining the go-ahead from market regulator SEBI to collectively raise an estimated Rs25,000 crore.

The companies which have let their regulatory approvals lapse since January this year also include Jindal Power, Lodha Developers, Sterlite Energy, BPTP Ltd, Ambience Ltd and Gujarat State Petroleum Corp Ltd.

The list of 15 companies mostly comprises entities from the real estate and power sectors. Reliance Infratel was the first company that failed to launch its Rs5,000 crore IPO before the regulatory approval lapsed on 11 January 2011, while Jindal Power is the latest addition to the list after the approval for its Rs7,200 crore public issue expired on 27 May 2011.

Market experts believe many companies were averse to hitting the market because of the subdued market conditions, as well as the fact that firms that did implement their public stake sale plans are trading below the issue price.

“As the first half of 2011 has seen missing FII inflows, resulting in lukewarm market sentiment, it is surely taking a toll on the IPO market,” SMC Global Securities strategist and head of research Jagannadham Thunuguntla said.

In all, 15 public issues were planned with the objective of raising about Rs25,186 crore. Other companies that axed their IPO plans at the last minute include Glenmark Generics, Neptune Developers, Kumar Urban Developers, AMR Constructions, Asian Business Exhibition & Conferences, Kabirdass Motor Company, PCI Ltd and Ankita Knitwear.

“This list is featured largely with real estate and power industries. That may be because real estate is completely out of favour of the market. And power has also become out of favour of the market because of the fact that several IPOs from the power industry in the past have given dismal returns to the investors,” he added.

Besides volatile market conditions, a high interest rate regime and a slew of recent scams involving real estate companies are also said to have contributed to the failure of realty players to successfully tap the market to raise funds.

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Tata AIG Life introduces Series II of funds under InvestAssure Apex Supreme

InvestAssure Apex Supreme is a 5-year limited pay plan with policy term of 10 years

Tata AIG Life Insurance has introduced the second series of funds under its guaranteed NAV unit linked insurance product viz Tata AIG Life Insurance InvestAssure Apex Supreme. 

InvestAssure Apex Supreme is a 5-year limited pay plan with policy term of 10 years and comes with the benefit of Guaranteed Maturity Unit Price (GMUP) that secures the highest NAV achieved under the product during the 100 reset dates. It also provides a Guaranteed Maturity Addition that is payable on maturity. The plan also offers a death benefit. 

The policyholder can opt for additional protection by choosing from four rider options namely Accidental Death Benefit Rider, Accidental Death and Dismemberment (long scale) Rider, Critical Illness (lump sum) Rider and Family Income Benefit Rider that provides Readjustment Income in case of an unforeseen event. This benefit provides an additional 1% of the sum assured every month for 100 months or till maturity, whichever is earlier. 

The policy can be purchased for any individual between the ages of 18 years to 65 years. The premium paid under this plan is eligible for tax benefits under Section 80C of the Income Tax Act, 1961. The proceeds of life insurance get tax benefits as per Section 10(10D).

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Bank credit up 20.9%, deposits rise 17.7% in 12 months

According to RBI data, credit offtake during the period stood at Rs41.23 lakh crore against Rs34.10 lakh crore in the same period of the previous year

Credit offtake from banks grew by 20.9% to over Rs41 lakh crore during the one-year period ended 17 June 2011, indicating an upswing in industrial activity.

According to the Reserve Bank of India (RBI) data, credit offtake during the period stood at Rs41.23 lakh crore against Rs34.10 lakh crore in the same period of the previous year.

Meanwhile, deposits went up to over Rs54.94 lakh crore till mid-June this year against Rs46.64 lakh crore as on 18 June 2010. This is a rise of over 17.7% on an annual basis.

In the annual monetary policy 2011-12 announced last month, the RBI had said that credit is likely to rise at a faster pace because of the economy's growth momentum.

“Sustained growth momentum could ... continue to exert pressure on interest rates through high demand for credit,” it had said.

The RBI had projected credit growth to be 19% this fiscal, while deposit growth has been pegged at 17%. During 2010-11, bank credit had increased by 21.5%, while deposits grew by only 15.5%.

In December last year, the apex bank had expressed concern over the widening ratio between the credit and deposit rates of banks. Toward the end of the last fiscal, however, the gap in the credit-deposit ratio stood reduced.

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