Monte Carlo lists below issue price

Shares trade at Rs 598 as against issue price of Rs 645

Apparel manufacturer Monte Carlo Fashions failed to excite investors as its shares made their debut on the bourses today. 

Shares of Monte Carlo listed at Rs 584, nearly 10% below the issue price of Rs 645. The shares were last trading at Rs 598 apiece on the National Stock Exchange (NSE). 

Monte Carlo is the first company this year whose shares have dropped below the initial public offer (IPO) price despite good response to its initial offer. 

Monte Carlo's Rs 350 crore-IPO was oversubscribed more than eight times. The company's 5.4-million share offering had received 24.9 million bids worth Rs 15,000 crore.

Strong debuts	Most IPOs this year have seen day one pop
	Issue size (Rs cr)	Listing day gains/losses (%)
Monte Carlo	350	-9*
Shemaroo	120	6
Snowman	200	80
Sharda Cropchem	352	50
Wonderla	180	30
Source: Exchanges

The category meant for institutional investors was subscribed 14 times. The retail portion had received a subscription of 6.6 times. There were very few high networth investor (HNI) bets running on the IPO, with the quota meant for these investors subscribing just 1.7 times.

Shares were priced Rs 630-645 apiece but given the oversubscription, the issue was priced at the top end.

Monte Carlo raised a little above Rs 100 crore from anchor investors at Rs 645 a share. The company's IPO saw its promoters and private-equity firm Samara Capital cutting their stakes.

According to analysts, Monte Carlo has strong balance sheet and an asset-light model but valuations are fairly valued at over 20 times one-year forward earnings estimate.

Despite the good investor demand and a sharp rally in the secondary market, few companies have tapped the primary market this year. Including Monte Carlo, a total of just Rs 1,200 crore has been raised from the IPO market this year, the lowest figure in more than a decade.

Investment bankers expect next year to be good for the IPO market. Currently, less than 20 companies have filed their offer documents to the capital markets regulator, Securities and Exchange Board of India. Bankers expect the queue of companies lining up for IPO approvals to get longer.

Manpasand Beverages, Vascon Engineers, Videocon d2h, Rashtriya Ispat Nigam and Sadbhav Infrastructure Project are among those that have filed their IPO documents.