SHARE TANKS AND CLOSES AROUND THE LOWS – DOWN 13%

One more listing and one more issue where investors have lost their shirt. Time and again, issue after issue the same thing is being repeated again and again. Issues are being aggressively priced or overpriced, then they are aggressively marketed and hype about the same is created and when the issue lists it tanks, falls or crashes. End result – Loss for investors.  Post listing the blame game begins where the sector, current market conditions are blamed for the price fall. No one is ever prepared to accept that the price charged was expensive and therefore the post listing price has taken a beating.

Coming to Hathway, the issue price band was Rs 240-265. The issue comprised of a fresh issue of 2 cr shares and an offer for sale of 77.5 lakh shares. The issue was priced at the lower price of Rs 240 and at this price the issue size would be Rs 666 crs. The fresh issue would raise Rs 480 crs for the company. The response to the issue was not over whelming and the issue was subscribed a mere 1.36 times with the retail portion being just about 25%.

The share listed on the BSE at Rs 246 which was higher than the issue price of Rs 240 and the opening price itself was the high. On the NSE similarly the stock opened at Rs 250 which was the high of the day. Thereafter it was down almost throughout the day. The low on the BSe was 206.20 while on the NSE it was Rs 204.50.

The trading volumes were not very high. The total volume was just about 137 lakh shares or roughly half the IPO size. The delivery volume was 11.6 lakhs or 8.47% of the traded volume. This delivery percentage or the total delivery seems insignificant to the price fall. A mere 11.6 lakh shares or a mere 4.18% of the IPO issue size of 277.5 lakh shares is insignificant for the kind of fall of 13% witnessed today. I believe if the price does not recover quickly we could see sharp erosion in price from current levels.

Very clearly amongst all the recent issues, a fall of this magnitude on such a poor delivery percentage is unheard of. It very clearly indicates that there is more pain ahead and investors should not look at investing in this company simply because it has fallen 13% or 20% from the issue price.