Backed by applications from a string of government banks and financial institutions (FIs), state-owned Rural Electrification Corporation's initial public offer (IPO) managed to clock in over one-time subscription within an hour of opening.
At the end of the day, the QIB portion subscribed 3.62 times, HNI 0.03 times and retail 0.07 times. While chances are that more retail applications may come in, investors bruised by the R-Power issue are unlikely to be gung-ho about the issue.
It's evident that investors would be more careful and pick and choose IPOs, instead of mindlessly investing to cash in on the listing price. "The key factor in this market is pricing.
In a bull run, companies become more aggressive in pricing as was evident in the issues of Wockhardt, Emaar MGF and R-Power. What happened was a reality check and brought back some sanity into the market. In the short-to-medium term, these hiccups will benefit both the market and investors. We will start seeing good issues at good prices," said Crisil Research senior director Arun Panicker.
ICICI Securities ED A Murugappan is of the view that things could only get better since typically retail and QIB demands step up on the last day. The issue is priced at Rs 90-105.
Close on the heels of REC, another issue that appears to have garnered good investor support is V-Guard Industries. It was graded 3/5 by Crisil. As per NSE data, the issue has been subscribed more than one time on day two of it being open for subscription. The issue was oversubscribed more than one time. Its QIB portion was subscribed 1.49 times, HNI 1.68 times and retail 0.38 times. V-Guard dominates the stabiliser business in the South and has a growing presence in the small-ticket electronic and electrical goods industry in general.
Meanwhile, OnMobile Global was listed at Rs 440, its issue price. The stock hit a low of Rs 421 and high of Rs 579 during the day before closing at Rs 521.90, almost a 19% premium to its issue price. On BSE, almost two crore shares changed hands at the counter. On NSE, the issue ended at a 18% premium to close at Rs 518.15. OnMobile Global provides telecommunications value added software products and services. in India with an expanding international presence.
