When will we see a vibrant primary market where companies will enter to raise money for capacity expansion?
Let’s not forget that world economies are still contracting. Export demand will remain affected. Many companies are working at lower production capacities in India also. Improvement in domestic demand will lead to higher capacity utilisation. This, in turn,will mean setting up of new capacities. So, companies may not come to the market to raise money immediately. If big investments come into infrastructure sectors, like the power sector, the situation can change significantly. There is a huge potential in the sector and its growth will percolate to other related sectors. So, any improvement in the primary market will take time… The primary market has already shown signs of improvement. Recently, three companies together raised nearly $2 billion through the QIP route. More deals could happen. Private equity deals would be closed faster. Disinvestment is expected. These could keep the secondary markets in check as some funds would be diverted to the primary market. Some market reforms
