The downward slope, according to Prime Database has come about due to poor sentiments, compounded by consistent poor quality of issues (which abound despite entry barriers). This led to the investors rejecting all the eight offerings.

This resulted in substantial devolvements as in the case of Abhishek Spinfab (Rs 20 crore), Dewan Sugars (Rs 14 crore), Welspun Syntex (Rs 35 crore) and the withdrawal of Highway User's issue (Rs 7 crore) which was due to lack of investors applications. When an issue is devolved, underwriters and promoters will have to chip in with the undersubscribed portion. Otherwise, the entiremoney will have to be refunded to the investors.

"The issue of Ashapura Minechem (Rs 20 crore) was so heavily overpriced in comparison to its market price so as not to evoke any public response," says the release from Prime Database. Out of these eight issues, five issues have brought in Rs 96 from the Rs 111 crore. The remaining three, which were very small, were only technical in nature without any public subscriptions. As per Prime, for the second year in running, equity on the whole seems to have disappeared. The equity public issues raised only Rs 332 crore in the recent six-months period while the amount in corresponding periods of 1996 was Rs 2,273 crore and 1997 was Rs 341 crore.

Of the total raised equity of Rs 332 crore, the manufacturing sector raised Rs 111 crore, and the remaining Rs 216 crore (65 per cent of the equity raised) was raised by banks and Rs 5 crore by NBFCs.

"Initial public offerings (IPOs) are heading towards extinction. The IPOs on offer in the first six months of fiscal1998-99 are 11 as compared to 51 issue in 1997-98, 716 IPOs in 1995-96 and 1,350 IPOs in 1995-96," says the Prime release. From the month of April to September 1998, 18 public issues hit the market. Any mobilisation in the primary market was mainly attributed to debt public issues from ICICI and IDBI which together raised Rs 2,076 crore. Debt and equity issues put together raised Rs 2,293 crore which constituted 95 per cent of the total amount raised. "For 15 months in succession, the primary market has witnessed an extremely low level of activity through public issues with only 44 such issue between July 1997 and September 1998," says Prithvi Haldea of Prime.