SCI has announced the price band for its FPO which opens on Tuesday the 30th of November and closes on Friday the 3rd of December as Rs 135-140. The stock closed at Rs 145.40 on the BSE on Friday which means that the share is being offered at a discount of Rs 10.40 or 7.15% at the lower band and Rs 5.40 or 3.71% at the upper band of Rs 140.
The discount in the issue of SCI is the lowest compared to the other issues which have come from the government. In the most recent case of Power Grid, the discount at the top end of the price band was Rs 12 or 11.76%. In the other cases of Engineers India the discount was Rs 47.65 or 16.43% and in the case of NMDC it was Rs 50.60 or 14.46%. All these discounts are at the top end of the price band.
The issue is opening on the heels of MOIL and looking at the low price discount in the case of SCI and the perception that shipping seems to be a very quiet sector would be a drag on the subscription. In the case of MOIL, the premium is ranging around 55 to 60% of the issue price. This would bring huge subscription to the issue and may actually end up with people weighing which of the two issues to subscribe to.
If one were to look at the share price performance in the last 12 months, the low was Rs 123.15 and the same was made on the 4th of November 2009. The high was Rs 202.50 on the 6th of October 2010. Post Diwali 2010, the share has fallen from a level of Rs 188 to Friday’s close of Rs 145.40.
There would be more discussion on the stock and prospects of the FPO on Tuesday, post the road show of the company in Mumbai on Monday.
