On Failing IPOs and greedy promotors

Well most Indian IPOs are failing with pathetic subscription figures now.

The reason is well know – A big market crash – very luxurious valuations – retail investor starting to analyze things – the fall in mkt price on listing of of future group ipo – and most important- plain and simple Promoter greed .

Wockhardt Hospitals : The issue opens on January 31 and closes on February 5.Even after revising the price band to Rs 225 (20 per cent at the lower end) and Rs 260 (16 per cent at the upper end) per equity share (from Rs 280 to Rs 310) its IPO is failing to get the figures. It has just been extended to February 7, lets see what magic the BRLMs and their merchant bankers can do …

The Emaar-MGF : The price band of Rs 610-690 for 10.26 million shares.The issue opened on February 1. same here – agricultural land bank.Issue will mostly be extended – Add rampup in print and in tv has failed to do the magic , they have powerful merchant bankers , lets see what they can do

The IRB Infrastructure Developers issue of 51.06 million eq is also in the same boat

Looks like the IPO markets r turning …. will they be effected by the mumbai chill?

IPO CLOSURE PRICE MIN INV SUBS (RETAIL)
Wockhardt Hospitals Limited -07-FEB-08 —-225-260 —4500— 0.06
SVEC Constructions Limited -08-FEB-08 —-85-95 — 5950— 0.01
Tulsi Extrusions Limited -05-FEB-08 —-80-85 — 6375 — 0.13
IRB Infrastructure Dev -05-FEB-08 —-185-220 — 5550— 0.06
Emaar MGF Land Limited- 06-FEB-08—- 540-630— 5400— 0.02
Manjushree Extrusions Limited- 06-FEB-08 — 45—- N/A—- N/A

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13 thoughts on “On Failing IPOs and greedy promotors

  1. Ankur- underwriting is of two kind- 1. underwriter buys off the entire IPO from the issuing firm and assumes all the risk.

    2. selling IPO shares on a % risk where the issuing company bears the risk.

  2. neways if the company is not able to sell 10% of the company in the IPO, then it cannot get listed….
    hence they will have to return the money back to the applicants….

    and in that case teh entire offering is canceled…

    neways i would put the blame on the i-banks managing the offering more than the promoters.

  3. Yes, and a valuable lesson has been taught by the market. Now, imagine if the Government had rules saying every fund house would have to ‘help’ underprivileged companies by buying 5% stakes in their undersubscribed IPOS, especially if the majority of the board comprises of minority or OBC classes, how many IPOs we would have been cursed with!?!
    πŸ™‚

  4. then dabble a bit in the fno to get the feel.

    basic reasoning is that when recession comes, there is less transport (of goods and humans), less economic activity and hence a dip in oil consumption

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