The Phoenix is a bird in Egyptian mythology that lived in the desert for 500 years and then consumed itself by fire, later to rise renewed from its ashes.
The Indian primary market is in the process of rising from its ashes. The Maruti IPO has sparked new excitement among market participants. Prospective issuers, the Government, Sebi and above all the investors, are eagerly awaiting IPOs worth thousands of crores that are in the pipeline. The secondary market is also in the recovery mode. Stocks across the board, from mid-cap to index stocks and IT to Pharma, all are rallying in a monsoon-ignited market. Hence, the conditions seem right for a tsunami of IPOs to hit the Indian markets.

The Indian primary market has traveled down a long road, particularly in the last decade after deregulation of the Indian economy in year 1992. With the abolition of the Controller of Capital Issues (CCI) in 1992, the floodgates to the Indian primary markets opened. In the post CCI era, companies could freely price their issues either at a discount or a heavy premium to the face value. In the same year, the Securities and Exchange Board of India (Sebi) was formed. Sebi was given the mantle of regulating the Indian capital markets. Its functions included monitoring and regulating the working of stockbrokers, bankers to an issue, merchant bankers, venture capitalists, portfolio managers, and other intermediaries who are associated with stock markets.

The methods of raising capital in the primary market have been varying greatly in the past decade. A very interesting development had been brewing in the primary market in the past decade. Issuers were shy of going to the public, and had started placing capital privately. As the graph `Trends' shows, the IPO route of raising capital dwindled from more than 45% in the FY1993 to just about 15% of the total resources mobilized in the FY2003. This was the result of more and more issuers preferring the private placement route because of its surety of raising capital, lower cost and less regulatory compliances.

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