Listed IPOs show some spark, primary market awaits action

India Infoline News Service | Mumbai | June 14, 2015 19:32 IST

Market experts expect a lot of activity in the IPO market sometime in the second half of the financial year once the present set of global as well as domestic worries abate and the stock market gets a little more stable.

IPO
At first look, the primary market seems to be down in the dumps in India, especially if one were to take into account some of the recent issues which required extension of the offer period and in at least two cases downward revision of the IPO price.

But a closer look at the IPOs that hit the market so far this year reveals a different story. As many as 14 IPOs pulled it off and got listed on the bourses successfully since January. And today, five of them are trading below issues prices but the remaining nine are doing extremely well, with one Raghuvansh Agro up as much as 210 per cent over its issue price, Athena Construction ruling with a gain of 180 per cent, AGI Infra quoting with a gain of 46 per cent, OP Chains up 45 per cent and VRL Logistics clocking a gain of 40 per cent, among others.

That, when the BSE benchmark Sensex is actually down year to date. 

Among the ones that are not doing very well are the three issues that were listed in May; MEP Infra is down 15 per cent, UFO Moviez is down 11 per cent and PNC Infratech down marginally at 0.16 per cent. Adlabs Entertainment, one of the high-profile IPOs which got listed early April, is also ruling 24 per cent down. Other IPO, Ortel Communication, which was listed in March is down 3.37 per cent as of Monday, June 8.

There is a long list of companies which have been either sitting with clearance from market regulator Sebi to hit the market with primary issues. This year alone, Sebi has given green signals to some 17 issues. Three companies -- Amar Ujala Publications, which publishes Hindi daily Amar Ujala, Infrastructure firm Dilip Buildcon and Kalpataru Power Transmission’s subsidiary Shree Shubham Logistics – got approvals on Monday. They had filed draft papers with Sebi during February-March.

According to the draft papers filed with Sebi, Dilip Buildcon's IPO would comprise fresh issue of equity shares worth up to Rs 650 crore and offer for sale of up to 1.49 crore equity shares by its existing shareholders.

Shree Shubham Logistics' proposed IPO comprises of fresh equity shares aggregating up to Rs 210 crore and an offer for sale of up to 70.07 lakh equity shares by its shareholder Tano India Private Equity Fund II. Amar Ujala's public offer consists of fresh issue of equity shares worth Rs 50 crore and an offer for sale of up to 26.90 lakh equity shares by existing shareholders.

Market experts expect a lot of activity in the IPO market sometime in the second half of the financial year once the present set of global as well as domestic worries abate and the stock market gets a little more stable. The stock market has been going through a weak phase in recent times amid global worries, valuation concerns and worries over the pace of growth revival in the domestic economy. The BSE Sensex is down about 3.6 per cent year to date.
 

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