Bourse debutants strike it rich

Most companies who have debuted recently on the bourses are trading at a premium to their issue price despite the equity market being in a listless state since the last few weeks.

Seven out of ten of the recently listed companies are trading at premiums over their issue price, data show. Some of the biggest gainers include Gokaldas Exports, which opened at Rs 566 on the Bombay Stock Exchange (BSE) on April 27, before closing at Rs 630.45, a 48.3 per cent premium over the issue price of Rs 425.

Similarly, Bharti Shipyard is currently trading at Rs 96, at 145 per cent premium over its issue price of Rs 66, while Dwarikesh Sugar closed at Rs 144.50 on Wednesday, a 122 per cent premium over its issue price of Rs 65. However, Deccan Chronicle, Jaiprakash Hydro and 3i Infotech are currently trading below their issue price.

A research head with a domestic broking firm said, "The trend in recently listed issues shows that investors are getting premium over the issue price in most fundamentally good companies."

This is especially good for retail investors as they get to participate in the equity markets via the primary market route.

But in the case of 3i Infotech, Deccan Chronicle and Jaiprakash Hydro-Power, prices have fallen marginally from their issue price. While 3i Infotech closed at Rs 96 on April 27 as against the issue price of Rs 100, Jaiprakash Hydro-Power is currently trading at Rs 29.55, 7.7 per cent lower than its issue price of Rs 32. Deccan Chronicle too is currently trading 1.6 per cent lower at Rs 159.45 as against its issue price of Rs 162.

Among other recently listed issues, SAL Steel which hit the bourses in November 2004, has appreciated 37.5 per cent over its issue price in the last five months. The stock is currently trading at Rs 39.60 as against its issue price of Rs 14.

Indoco Remedies and Jet Airways too have appreciated more than 20 per cent over their issue prices. Indoco Remedies is currently trading at Rs 298.90, up 22 per cent over its issue price of Rs 245.

The stock, however, has slipped from its listing price of Rs 396. Jet Airways is currently trading at Rs 1,321.90 as against the issue price of Rs 1,100, a premium of 20.2 per cent.