Ipo Season Q2 2009

The current IPO season started with a few Ipos including Mahindra holidays and two talked about power listings NHPC and Adani power.

ADANI POWER BSE: 533096  |  NSE: ADANIPOWER

IPO ISSUE PRICE 100 1St Day close 100.10 Today  100.85

NHPC BSEId :533096    NSE Id :ADANIPOWER

IPO ISSUE PRICE 36 1St Day/ Today close 36.70

Both have barely given ANY returns to their investors as they were fully priced, thus most small and leveraged investors must be a disappointed  lot. Another Raj oil mills has been hammered well below listing price(27%).

The lead managers Enam have justified/defended the pricing by asking investors to take a long term view, that too in an edgy flippers market, when past experience has been mixed to negative.

It is common knowledge that both the management and managers to some issues use different tactics  from making/using unknown front companies to bit in the qib segment, to cultivating HNIs and renting demat accounts to offering grey market premiums to retail investors etc to make sure that the issue is oversubscribed .

What i have noticed in these ipos is that though the QIBs demand  is very high even on the first day(even after SEBIs new rules), the HNIs and the Retail subscription Eg NHPC  comes in very late.  Thank God, over subscription has become much more sane, especially in the retail category as most investors have seen through the game / not forgotten that they have made at least 50% losses on various ipos like Edelweiss , Reliance Power, Kolte Patil, Brigade etc.

NHPC IPO Oversubscription

Qualified institutional buyers (QIBs)  subscribed 29.16 times.
Non institutional investor category, was subscribed 56.70 times.
Retail investor category was subscribed 3.87 times.

I am still unsure as to why even after such high oversubscription 29/56  times why a solid psu script lacked demand  and languishes at almost ipo levels on day one .

All in all things will be very interesting as the Oil India IPO has been announced at Rs. 950 to Rs. 1,050 per share, that too when a fully valued secondary market (NSE 4700) is waiting to correct.

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4 thoughts on “Ipo Season Q2 2009

  1. I was suprised about NHPC myself… but maybe its because just too many people r subscribing to IPO for listing gains that there r just sellers and no buyers…
    i am optimistic about prices today

    1. i see something more sinister
      Qib and hni segment has long been fixed
      lets see OIL India will be something of an acid test.

      “i am optimistic about prices today” can u clarify ?

  2. well i expected 2 things..
    Sensex to go up by a 100 points or so
    and the selling pressure which NHPC was facing yesterday to ease out….

    clearly i have been proven wrong on both aspects.. i have never seen a flatter price chart than what NHPC is showing me

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