Indian share sales on track to double this year

Indian share sales on track to double this year

NEW DELHI: Indian share sales may double this year, buoyed by record demand from investors attracted by the fastest pace of economic growth in almost two decades, JPMorgan Chase said.

Companies in India have raised $12.1 billion in share sales so far in 2007, up from $6.34 billion a year earlier, according to data compiled by Bloomberg.

ICICI Bank's record $5 billion sale, in India and overseas, drew demand for more than 11 times the amount offered to local investors.

"We wouldn't be surprised at all if this year the market were to double," said Vedika Bhandarkar, managing director and head of investment banking for India at JPMorgan Chase in Mumbai.

"There's a huge equity pipeline coming in the next 6, 12, 24 months from India."

State Bank of India, the nation's biggest by assets, will be allowed to raise as much as 80 billion rupees of capital once the government permits the state-owned holding to be lowered to 55 percent from 59.73 percent, the company's chairman, Om Prakash Bhatt, said last week.
Laws that will allow the bank to raise more funds are expected in two months, he said.

HDFC Bank, the nation's third-biggest by value, plans to sell $1 billion of shares and use the proceeds to meet accelerating demand for loans from consumers and companies. A date for the sale has not been set.

Indian banks will need to raise 500 billion rupees this year to bolster capital as lending rises, India's banking secretary, Vinod Rai, said April 19 in New Delhi.

Still, government curbs on ownership and foreign investment limits for state-run lenders could make it harder for them to sell stock, said Uday Kotak, executive vice chairman of Kotak Mahindra Bank.