MUMBAI JPMorgan expects share sales in India to reach as much as $30 billion in 2010, a 50 percent increase, led by government stake sales and IPOs by power and property firms, its India investment banking head said.
Indian firms raised $20.2 billion from share sales in 2009, mostly through follow-on offerings -- a 181 percent increase from a year earlier, encouraged by an 81 percent jump in the stock market, according to Thomson Reuters data. IPOs accounted for just $4.1 billion of the total.
"This year is going to be all about IPOs and government sell-downs," Vedika Bhandarkar told Reuters in an interview. "There may also be a second round of fund raising from some firms that raised money last year," she said.
Among Indian IPOs, the biggest in the pipeline is a planned $1.5 billion listing by private sector electricity firm Jindal Power.
JPMorgan counts itself as one of the arrangers for another major power sector IPO -- an expected $1.1 billion offering from Sterlite Energy, part of the Vedanta Group.
It is also part of several upcoming IPOs from real estate firms, including Lodha Developers and Prestige Developers.
A rush of share sales from power and real estate firms means not all may succeed, Bhandarkar said.
"There is a lot of supply in real estate and power, and I am not sure if all companies in these sectors will be able to raise capital," she said.
Investors will be choosy, further raising the risk for companies, especially those in the real estate sector, planning IPOs.
"There is going to be much higher leverage with investors in terms of what stocks they buy, and the valuations they are ready to pay," Bhandarkar said.
"There is going to be a sharp distinction between companies, which is why I'm not certain everyone in real estate will be able to get listed. You will need a real and sustained bull wave for all the companies to get capital," she said.
JPMorgan had 12.4 percent of the Indian share sale market last year, placing third on the Thomson Reuters equity capital markets league table for 2009, compared with seventh place a year earlier.
Morgan Stanley, which topped the 2009 rankings for India, expects Indian companies could raise roughly $70 billion through share sales over the next three years, provided markets remain strong.
Upcoming Indian issues include a planned government stake sale in top Indian power firm NTPC Ltd to raise up to 120 billion rupees ($2.6 billion), a deal led by JPMorgan, Citigroup, Kotak Securities and ICICI Securities.
(Editing by David Cowell)