The combined broker and analyst meet took place at the Regal room of the Trident on the 20th of July 2009. There were more than seven hundred people present – a record by itself pointing to some sort of euphoria being created in the market place. I am not sure whether there is some magnetic energy also generated along with electrical energy in issues which concern power generation. We all in the capital markets will remember that the primary markets virtually collapsed post the Reliance Power issue listing. Let’s hope and pray no such thing happens in this IPO.
With 700 people or more attending the meeting, I thought the question hour session would be an extended one but to my utter surprise there were just a handful of questions and they failed to even cross five in number. Probably no one was interested in questions with the IPO price not yet announced. Some elements which did come out however are being detailed below.
Firstly as recently as less than a month ago a pre – IPO placement of shares was made on 25th June 2009 to M/s 3i Power Investments AI Limited at a price of Rs 81.42 per share. The investor was allotted 91,42,139 shares. On the same date another allotment of 269,05,830 shares was allotted to a group company Capital Trade and Investment Private Limited at a substantially higher price of Rs 111.50.
In March 2009 when are markets were down in the dumps, a substantially large allotment of 705,20,033 shares was made on 31st March 2009 to a group company Ventura Power at a rate of Rs 70 only. I believe this time the greed amongst promoters and merchant bankers seems to be rising very fast and is in a multiple of the rise in the BSESENSEX and the NIFTY. One indication about pricing which was given is that the upper band would not exceed Rs 100 and the price band would be announced in the newspapers of Friday the 24th of July.
It may also be mentioned that the first government disinvestment in the form of National Hydro-Power Corporation Limited which is planning to tap the capital markets in the first fortnight of August was looking at an upper price band of Rs 20, has now changed its mind and wants to charge about Rs 30 for the same share. This is being mentioned that a small rise in the indices can change even the government’s expectation by as much as 50% why would the private sector be falling behind in any way.
I am worried about only one thing – the primary market is reviving after about 16-18 months and that is why it is being nicknamed as IPO Season 2. I hope that pricing and the greed of promoters should not bring about a pre-mature end to the IPO Season even before we have taken off and are in full swing.
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