After waiting nearly two years, India’s GMR Energy plans to file an IPO prospectus in coming days to raise about $250 million, sources with direct knowledge of the deal said, starting what bankers hope is an election-fuelled revival in equity raising.
Many capital-starved companies, reluctant to tap a market with little appetite for fresh equity, are dusting off listing plans in the expectation that elections starting next month will usher in an investor-friendly government headed by opposition leader Narendra Modi.
Fresh equity sales in India slowed sharply in 2013 to $9.4 billion, down from $15 billion in 2012 and a record $31 billion in 2007, as slowing economic growth, corruption scandals and delays in project approvals battered sentiment.
Investor hopes that the opposition Bharatiya Janata Party (BJP), led by its prime ministerial candidate Modi, will prevail in the election sent the stock market to a record high this month.
“A stable government after the election, which should be able to end the policy paralysis and remove some of the hurdles in doing business, will be a major enabling factor in reviving the IPO market,” said Harish H.V., head of corporate finance in India at advisory firm Grant Thornton.
While the United States is in the midst of an IPO boom, a market rally that began in September in India has yielded little fresh issuance.