The primary market is in a deep slumber

IIPM’s 36th Glorious Year of Academic Excellence

The primary market is in a deep slumber. Even the renewed indications of a global meltdown have just started creeping in. So the simplest thing for the companies planning to dive into the capital markets now is to wait and watch, feels Gyanendra Kashyap...

Samat is literally terrified at the mere mention of an IPO (Initial Public Offering); and why not, his euphoric success in terms of gains from IPOs has dampened like never before. Little did he realise the strong correlation between the primary and secondary market – as the secondary market tanks the primary market goes in for a long slumber. Like anyone else he too was taken in by the fact that the 2007 success story of IPOs (wherein 3 out of every 10 gave returns of more than 100%, 3 eroded the shareholders wealth and the remaining gave returns much higher than the benchmark index) will continue in 2008. To add to the greed of Samat and his ilk, the January sell out of the largest IPO, Reliance Power, which sucked Rs.100 billion out of the market within minutes, laid a solid foundation for bullish expectation from the market in the future to come. But unfortunately, the bullishness started and ended there. What happened to Emaar MGF and Wockhardt’s fund raising plans thereafter is well known. Well, the secondary market which was at its meteoric heights early on in the year has so far tanked over 30% and moving parallel the primary market offerings have also witnessed a sharp decline (35 in first 7 months of 2008 as compared to 65 for the same period in 2007).

Meanwhile, one can see a few gladiators marching ahead to reverse the situation. But, the question remains, will the forthcoming big IPOs be able to woo institutional as well as retail investors and help the market get going? Samat who has burnt his fingers avers, “Capital markets and investor sentiments determine the success of an IPO; as compared to last year the public markets today are not so receptive to IPOs.” Sounds logical indeed!

The non receptiveness of the market was very much evident during the Emaar MGF IPO process, wherein despite two rounds of price cut and a deadline extension it failed to attract investors and finally had to withdraw the IPO from the market. A very similar story holds true for Wockhardt. Both the companies moved out of the market citing the adverse market conditions. The fact that IPOs just do not happen in a free fall corrective market is reflected by the retardation in the number of listings (75, 96, 112 and now 35 respectively in 2005, 2006, 2007 and 2008 year to date).

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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The banking revolution begins now!

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But issues like security & inter-operability need to be addressed first

Banking is all set to don a new face with mobile convergence...
Navin Thangiah, Director, Market Development,mChek


The mobile phone has revolutionised the way we interact with each other; everyone and everything is just a phone call or an SMS away. Consumers are now demanding the same convenience and instant access in other aspects of life; ‘anywhere, anytime’ has become the norm. Businesses have realised this trend and are exploring ways to satisfy this demand.

The mobile phone is today our personal ‘smart’ device and our mobile number has become our primary identity. One of the first applications of this is in the field of ‘identity management’; use of the mobile phone as a personal authentication and authorisation device. This is at the core of most mobile wallets, a mobile application residing on the consumers mobile and accessible only with a PIN that is created by the user on his phone and hence known only to the consumer. A financial and transactional layer is then built on top of this platform. The transactional layer comprises of various financial instruments like a credit card, debit card, bank account that the consumer can ‘add’ to his mobile application and use as the source of funds for transactions. The transactional layer enables the application to interact with a common payment network that allows the money to be sent to the biller’s account.

While the concept is simple there are many practical issues like security, inter-operability and simplicity that need to be addressed before choosing the right solution. In fact, mChek solution is now focusing on building a simple secure platform that can work across banks and operators without influencing their existing relationship with their respective consumers.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
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IIPM Ranked No. 1 B-School In Global Exposre - Zee...
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4Ps Power Brand Awards 2007