The year has started on a positive note for primary market investors. The shares of DB Corp on Wednesday listed at a huge premium to their initial public offer (IPO) price, the third listing in as many days to have given good returns on day one.
With this, the sentiment in other recently-listed shares has turned positive. The bounce-back in equity markets has ensured that 60 per cent shares listed in the past year are trading above their issue prices.
DB Corp, the publisher of Dainik Bhaskar, listed at Rs 250, a premium of 18 per cent, on the Bombay Stock Exchange (BSE). It closed 25 per cent higher at Rs 265.90 as against the issue price of Rs 212. The company had allotted shares to retail investors at a discounted price of Rs 210 per share.
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The shares of all three companies that listed this week, DB Corp, Godrej Properties and JSW Energy, are trading 7-25 per cent above the prices at which they were allotted. Two power stocks, NHPC and Adani Power, which were trading below their issue prices, closed above these levels on Wednesday.
An executive of Enam Securities, lead manager for the DB Corp issue, said: “DB Corp had left something for retail investors, which has been reflected in the listing. The investors have also found value in other recently-listed shares that have been trading at a discount.”
The surge in shares of NHPC and Adani Power is part of a trend in power stocks, which are rising ahead of NTPC’s follow-on offer. The BSE power index was at a 52-week high on Wednesday, led by Tata Power.
The shares of 13 out of 20 companies that listed over the past year are above their issue prices. These 13 companies collectively raised Rs 16,498 crore from the public. The currently value is 11 per cent more at Rs 18,311 crore.
The BSE Sensex has risen 7 per cent, or 1,095.35 points, in the past 10 trading days. It closed at 17,696.55 on Wednesday. The BSE’s IPO index touched an all-time high yesterday. Retail investors who stayed away from the IPO party on Dalal Street missed an opportunity, said analysts. This is because retail investors had stayed away from Godrej Properties, JSW Energy and Cox and Kings issues. JSW Energy and DB Corp had offered a discount to retail investors.
Godrej Properties, listed yesterday, is trading at Rs 525.45, a 7.2 per cent premium to its issue price of Rs 490 per share. JSW Energy raised Rs 2,700 crore in the IPO and is trading at Rs 112.90, a 13 per cent premium over the issue price of Rs 100 per share. The company had offered a Rs 5 discount to retail investors in its IPO.
Cox and Kings mobilised Rs 610 crore and is currently trading at Rs 444, about 35 per cent higher than the issue price of Rs 330. The retail portion was subscribed about 0.93 times.
Adani Power closed at Rs 107.50, about 7.5 per cent more than the issue price of Rs 100, while NHPC closed at Rs 107.50, as against the issue price of Rs 100 per share.
“Retail investors had stayed away from the IPO market after shares of most power companies in which they had invested fell below their issue prices,” said an analyst.
However, Indiabulls Power is trading at Rs 37.45 as against its issue price of Rs 45, Raj Oil Mills is at Rs 75 (issue price was Rs 120) while Excel Infoways is at Rs 60.70 (issue price was Rs 85).
