A couple of years ago, Hemendra Kothari wouldn't have thought of raising $9.3 billion (Rs 38,130 crore) for three companies (including ADRS for Sterlite and icici Bank) in a short span of 10 days. The 61-year-old Chairman of DSP Merrill Lynch pulled off that feat last fortnight. Indeed, the huge demand for raising moolah across emerging markets like India and China in the primary market is all set to make the Asian region the leader in the league tables across continents.
As per Thomson Financial, the region is expected to raise $145 billion (Rs 5,94,500 crore) in 2007. Till end-June, the European region and American regions continued to be the highest money raisers, mopping up $108 billion (Rs 4,42,800 crore) and $98 billion (Rs 4,01,800 crore), respectively. But for the rest of the year, Europe is expected to raise $23 billion (Rs 94,300 crore) and a mere $8 billion (Rs 32,800 crore) is expected to be raised by us and Canadian companies. Asia, on the other hand, has raised $83 billion (Rs 3,40,300 crore) so far in 2007, and another $61.7 billion (Rs 2,52,970 crore) is expected to be mopped up in the next six months.
China is expected to be the biggest money raiser, accounting for nearly half ($71 billion or Rs 2,91,100 crore) of the total money that will be raised from the region. India follows, with $16.4 billion (or 11 per cent) expected to be mopped up from public issues. China Mobile is expected to hit the market with a $10.5 billion (Rs 43,050 crore) issue in Shanghai, whilst in India, the State Bank of India has a $1 billion (Rs 4,100 crore) offering in the works (at the time of writing DLF and ICICI Bank had raised a total of nearly $5.3 billion or Rs 21,730 crore).
Says Gurunath Mudlapur, Managing Director, Atherstone Institute of Research: "This reiterates that the action is mainly in the world's two largest economies. Capital requirement for capacity expansions has been the primary reason for companies in these regions tapping the market."