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Sensex has lost only 10 to
15 per cent since May 11, most of the IPOs which entered
the market in the last 12 to 18 months are either
trading at a hefty discount or at a marginal premium.
Even some of the good companies, which have strong track
records, are currently trading at discount to their
offer price. “Most of the issues had been aggressively
priced, leaving nothing for the long-term investors,”
say investment bankers.
Analysts argue that
because of a sharp run in the market before May 2006,
there was profit booking which accentuated by changing
global geopolitical scenario. This has further dampened
the share price of these issues. In this backdrop, some
of the big-ticket issues like DLF, Parsvnath and GMR
Infrastructure have either deferred their issues or have
decided to reduce the premium. “Given the kind of
returns in the primary and secondary markets, foreign
funds will come more in the form of private equity
funds,” said Sailesh K. Jha, director of Credit Suisse.
“The fund managers are looking at long-term commitments
and not short-term investments,” Jha said. The inflow by
the FIIs, Jha said, was unlikely to cross $10 billion as
it happened last fiscal. As per current trends, FII
inflow will be in the vicinity of $6 to $8 billion.
Take the case of Jet Airways. The public issue was
priced at Rs 1,100. Now it is trading at less than Rs
500. “Nothing has changed barring the fact that fuel
prices have gone up. But this must have been factored
into future performance before hand,” an analyst pointed
out.
Similar was the case of Punj Lloyd, one of the leading
players in the infrastructure sector. It had entered the
market in December 2005 at Rs 700 per share, now it is
trading at Rs 637.
Though there are some companies like Suzlon, BL Kashyap,
IDFC and Sun TV, which are trading at premium to the
offer price, but their number is small.
Out of the IPOs which entered the market in the last 12
to 18 months, 654 are trading at below offer price, only
22 at premium JET AIRWAYS Issue price Rs 1,100 Date:
24/02/2005 Rs 491.75 Current price Percentage change
-55.30 PNB Rs 390 Issue price Date: 11/03/2005 Rs 303.55
Current price Percentage change -22.17 PUNJ LLOYD Rs 700
Issue price Date: 16/12/2005 Rs 637.50 Current price
Percentage change -8.93 OBC Rs 250 Issue price Date:
29/04/2005 Rs 143.85 Current price Percentage change
-42.46 JINDAL POLY Rs 360 Issue price Date: 15/06/2005
Rs 129.90 Current price Percentage change -63.92 GVK
POWER Rs 310 Issue price Date: 07/02/2006 Rs 148.15
Current price Percentage change -52.21 |
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