Saga of the listing premiums continues

The Shoppers' Stop counter listed at a big premium on the bourses on Monday. The counter attracted strong buying attention, highlighting the investors appetite for good quality shares, analysts said.

A look at companies who have made their debut on the bourse this year indicates that 8 out of 12 initial public offerings (IPOs) this year have seen premium listings. 

Debut dons
	Issue price (Rs)	Listing price (Rs)	Premium/ discount (%)
Indoco Remedies	245	396	61.6
Jet Airways	1100	1305	18.6
UTV Software Communications	130	168.50	29.6
Gateway Distriparks	72	112.05	55.6
Jaiprakash Hydro-Power	32	31.15	-2.7
3i Infotech	100	98.10	-1.9
Gokaldas Exports	425	630.45	48.3
Shringar Cinema	53	45.15	-14.8
Allsec Tech	135	128.10	-5.1
Saksoft (NSE)	30	100.80	236
India Infoline	76	78.05	2.7
Shoppers' Stop	238	372.60	56.6

The Saksoft IPO received the maximum premium of 236 per cent on debut but the issue size was worth only Rs 7.50 crore. The Saksoft counter listed at Rs 100.80 against an issue price of Rs 30.

Indoco Remedies received a premium of 61.60 per cent to list at Rs 396, Shoppers' Stop listed at a 56.60 per cent premium over its issue price of Rs 238, Gateway Distriparks listed at Rs 112.05, a premium of 55.60 per cent and Gokaldas Exports listed at a premium of 48.30 per cent at Rs 630.45.

The Shoppers' Stop scrip closed at Rs 372.60, up 56.60 per cent from its issue price of Rs 238 on the Bombay Stock Exchange (BSE). The counter had earlier opened at Rs 335 on the BSE, a 40.9 per cent premium over the issue price. More than 42.20 lakh shares were traded on the BSE. The counter closed at Rs 371.60 on the National Stock Exchange with traded volumes of more than 76.70 lakh shares.

Given the kind of premium that IPOs have drawn so far, brokers said IPOs could be a better alternative for small investors.

A leading merchant banker said, "Strong returns from IPOs clearly suggest that this is the safest route for first-time investors. It also suggests that the quality of IPOs have improved following the stringent norms set by Sebi, for clearing the new issue. IPOs have proved to be a good way to expand the investor base which was proved from the fact that demat registrations had shot up at the time of the TCS and NTPC issues last year," brokers added.