It’s was a mixed bag for the two companies making their stock market debut on Thursday. State-owned National Buildings Construction Corporation (NBCC) disappointed, while tutorial company MT Educare shone.
The shares of NBCC, part of the government’s 2011-12 disinvestment programme, closed at Rs 97.30, about 8.2 per cent below its issue price of Rs 106. The shares had declined as much as 9.5 per cent to Rs 95.95 and touched a high of Rs 101 during the day.
The weak debut again spotlights the government’s aggressive pricing of public issues. In March, the government was criticised for expensively pricing the Oil and Natural Gas Corporation share-sale, which saw poor response from investors and eventually had to be rescued by Life Insurance Corporation.
“One reason for the poor-show could be investors’ apathy towards public issues from the government due to aggressive pricing,” said Arun Kejriwal, director at investment advisory firm KRIS.
Meanwhile, shares of private-equity backed MT Educare, which mopped nearly Rs 100 crore from its IPO, closed at Rs 90.35, about 13 per cent higher to its issue price of Rs 80. The stock touched a low of Rs 86.05 before getting locked in the upper circuit limit of Rs 90.35. The company is a provider of tutoring and test preparation services and is backed by Helix Investments, a private equity firm.
Both the IPOs being below Rs 250 crore in size, trading was only allowed in the trade-to-trade segment, meaning all trades had to be delivery-based. As a result, both NBCC and MT Educare clocked an unsually low trading turnover of just Rs 21 crore each on both the exchanges combined. Typically, first day turnover of companies is at least two to three times the issue size.