Silicon Valley: The US IPO (Initial Public Offering) market is getting busy once again with 36 companies going public in the first quarter of 2004, registering 600 per cent surge in the number of initial public offerings compared to the corresponding period last year.

In what is seen as a healthy start and a real positive sign for the rest of the year, the IPO market raised $ 7.8 billion during the first quarter, according to the latest IPO scorecard from Hoover's, Inc., a leading provider of business information and publisher of Hoover's Online. This compares to only six IPOs in Q1 2003, which raised under $ 995 million.

"Positive expectations are fuelling this IPO market. Traditionally, first quarter is the quietest IPO quarter, but with 36 new offerings, this activity marks the most first-quarter action since the peak in 2000," said Justin Burrows, Hoover's money editor.

"Additionally in first quarter, 78 companies filed to go public, adding significantly to the pipeline of upcoming IPOs. Barring a market decline, these backlogged IPOs should bear fruit in a strong Q2 and Q3."

"A strong IPO market is essential for the long-term health of the venture capital industry. In the past two quarters we have witnessed increased strength in the IPO market, which is a positive sign. However, current IPO activity continues to significantly lag where we need to be in order to declare full recovery," said Mark Heesen, president of the National Venture Capital Association.

According to Hoover's the first week of February 2004 was the busiest week for the IPO market in more than three years and by mid-February, there were twice as many IPOs than the first six months of 2003.

The average first quarter 2004 IPO commanded a higher price despite slightly weaker financial performance versus the IPOs of fourth quarter in 2003. In fact, the IPOs in Q1 2004 raised 20 per cent more money compared to the IPOs of Q4 2003.

The 2003 IPO market did not show much momentum until the fourth quarter, when 50 companies went public, surpassing the number of IPOs for the previous three quarters of 2003 combined.

The surge in activity carried over into Q1 2004, as the growing economy encouraged companies to raise money for expansion. The majority of Q1 2004 IPOs priced in at the high end of estimates and closed up on their first day of trading.