Issue fatigue in bourses

Most recent IPOs below issue price

Dredging Corp bucks trend, at premium to selloff price.

The dream of investors of making a quick buck from the recent public offerings has crashed. Most of the recent stock issues are now trading at a much lower price than their issue or listed prices.

IPCL, CMC and IBP are trading below their issue price. Even recently listed private issues like Patni Computer, Indraprastha Gas and TV Today are trading below their listing price and each one has come under serious selling pressure in the last few trading seasons.

The Patni Computer scrip today closed at Rs 210, below the issue price of Rs 230. The scrip opened with a bang on listing, scaling a high of Rs 320 on the opening bell. The Indraprastha Gas scrip is currently trading at Rs 70, above the issue price of Rs 48 but way below the listing price of Rs 166. So also, the TV Today scrip, issued at Rs 95 and listed at Rs 181.35, is now trading at Rs 130.95.

Even Gail, whose new shares were expected to be credited to the shareholders' account tonight, has come under selling pressure with the stock sliding Rs 8 today to close at Rs 210.85, as against the issue price of Rs 195. Retail investors were offered these shares at Rs 185.25, a 5 per cent discount to the discovered price.

According to market sources, the reasons for some of these issues failing to fetch decent returns on listing is that the market sentiment has turned bearish in the past month and some issues were very aggressively priced.

Ashok Kumar, CEO Lotus Strategic Consultants said, "In recent public issues, the pricing did not take into account the fall in the market and some of  the private issue were very aggressively priced. In the forthcoming issues, I expect the pricing to be more reasonable, thereby providing an opportunity to investors."

The day IPCL shares were credited to shareholders' demat accounts, the stock's price was down almost 6.8 per cent. It has plunged over 20 per cent from its high of Rs 225.35 on March 8 to today's close of Rs 177. IPCL shares were allotted at Rs 170 per share in the general category and for Rs 161.50 per share to retail investors.

Even in case of IBP, the share price plunged below the issue price of Rs 620 as soon as fresh shares were credited to the investors' demat accounts. The IBP scrip closed today at Rs 529 (down 7.38 per cent), and has fallen from a high of Rs 673.65 on March 8. The IBP shares were allotted at Rs 620 in the general category and at Rs 589 in the retail category.

CMC, too, has tumbled after the completion of the public issue. The stock was down 1.61 per cent to Rs 494 in Monday's trading which is only slightly above the issue price of Rs 485 set for non-retail investors. Retail investors were allotted shares at Rs 460.75.

The Dredging Corporation of India (DCI) stock is the only one standing tall: at a good premium to the issue price. However, DCI too has taken a pounding falling from its all time high of Rs 598.50 to today's close of  Rs 466.55.