DNA Money Edit: Why Indian IPOs have hit slow lane

Lodha Developers's proposed big-ticket initial public offering (IPO) is among several such maiden floats that are currently on hold. Everyone cites unfavourable stock market condition as the prime reason for the delay. Though Lodha's Rs 4,200 crore IPO can technically be launched in the next six months, the general elections due in May will make the float nearly impossible in a potentially volatile market now.

Over half of the firms listed in 2018 are currently trading below their issue prices. Last year, 24 firms raised Rs 30,959 crore, less than half of Rs 67,147 crore raised by 36 companies in 2017. The year 2019 has opened on an extremely pessimistic note as most big companies have decided to keep their IPOs in abeyance.

If in case the promoters still want to hit the primary market, they may be forced to prune the issue size. Around 60 companies, which received approval from the market regulator to raise over Rs 63,000 crore, are yet to come up with their IPOs.

This may also impact the government's plans to raise money by listing public sector undertakings. Shares of most state-owned firms have failed to garner good returns.

Meanwhile, companies are looking to raise funds through alternate routes. Lodha, for instance, decided to sell its equity interest in their two London properties and plans to complete its projects.