This is the best time for the government to take the lead in reviving the primary market. Divestments and offerings from PSUs at attractive prices can pull back investors easily. Once the momentum starts, the sentiments would improve.

Every time the secondary market tanks, the primary market goes into a slumber. After a four-year bull run, the IPO market in India hit a bear cycle in early 2008; from the highest-ever mobilization of Rs 41,323 cr in 2007-08 through 84 IPOs, the raisings nose-dived to a meager Rs 2,034 cr in 2008-09 with 21 IPOs, all small ones.

In 2008, as many as 33 companies that had planned to collectively raise Rs 27,896 cr allowed their IPO approvals to lapse. These companies included some big names like Reliance Infratel (Rs 6,000 cr), Adani Power (Rs 3,000) Jaiprakash Ventures (Rs 4,000), Future Ventures (Rs 2,600), UTI Asset Management (Rs 2,000), Acme Telepower (Rs 1,200), Mahindra Holiday Resorts (Rs 300), MCX (Rs 600) and DB Corp (Rs 350). In addition, as many as 12 companies that planned to collectively raise Rs 7,707 cr withdrew their offer documents from Sebi, including the mega IPOs of JSW Energy (Rs 3,000 cr) and Bharat Oman Refineries (2,400).

When the secondary markets started recovering in March this year, hope was rekindled that the IPO market too would revive soon. However, while the Sensex has since more than doubled, the IPO market continues to be nervous. Despite a huge pipeline, the first three quarters of the current fiscal (2009-10) have seen only 19 IPOs, though the amount mobilized has been a respectable Rs 19,463 cr.

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