IPO Casualty: IT People
Inspite of the fast & furious bounce-back in Indian market indices, the IPO scene isn’t all that pretty. After the poor showing by Purvankara yesterday, today we have a withdrawal by IT People:
| Sr.No. | Category | No.of shares offered/reserved | No. of shares bid for | No. of times of total meant for the category |
| 1 | Qualified Institutional Buyers (QIBs) | 6410417 | 3000000 | 0.4680 |
| 1(a) | Foreign Institutional Investors (FIIs) | 3000000 | ||
| 1(b) | Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies) | 0 | ||
| 1(c) | Mutual Funds | 0 | ||
| 1(d) | Others | 0 | ||
| 2 | Non Institutional Investors | 1923125 | 34800 | 0.0181 |
| 2(a) | Corporates | 31200 | ||
| 2(b) | Individuals (Other than RIIs) | 3600 | ||
| 2(c) | Others | 0 | ||
| 3 | Retail Individual Investors (RIIs) | 4487292 | 229600 | 0.0512 |
| 3(a) | Cut Off | 204000 | ||
| 3(b) | Price Bids | 25600 | ||
| 4 | Employee Reservation | 754167 | 5000 | 0.0066 |
| 4(a) | Cut Off | 5000 | ||
| 4(b) | Price Bids | 0 | ||
| 5 | Group Company Reservation | 1508333 | 1287800 | 0.8538 |
| 5(a) | Cut Off | 22200 | ||
| 5(b) | Price Bids | 1265600 |
As you can see above, it was severely under-subscribed. This is a bit surprising though: if you look at August month IPOs, they have performed quite well, with double-digit gains on average.
Only 4 out of 13 IPOs are in the red - not bad given what the market went through this month.
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September 1st, 2007 at 10:49 am
Think poor performance of sub-standard issues is a sign of maturing investors. Purvankara was plain expensive and IT People has been headed nowhere in the past few years that it has been listed. Hence, i think it’s not appropriate to say that the Primary market is seeing a slow down going by these 2 issues.
I’m sure good ones (in the offing) like PFC will see unabated over-subscription irrespective of where the indices are headed as long as the company and the price at which it is being offered is attractive.
September 3rd, 2007 at 12:52 am
Interestingly, latest blog entry (http://behaviouralinvesting.blogspot.com) of James Montier - the author of Behavioural Finance and Behavoural Investing - sites a research which indicates that it may not be worth investing IPOs. The research can be downloaded from following location:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=965450