The first three days of trading in calendar year 2010, will each see a new share being listed on the bourses. On the 4th of January JSW Energy Limited would be listed. Tuesday the 5th of January would see Godrej Properties Limited being listed. Wednesday the 6th of January would see DB Corp Limited being listed. Readers would recall that these three IPO’s were back to back and were open for subscription from 7th to 9th December, 9th to 11th December and 11th to 15th December respectively.
The importance of these listings would be borne out from the fact that these are high profile issues and their failure or success would have a big impact on the market going forward. The first issue is JSW Energy Limited, a power generating company which raised 2700 crs. The price band was Rs 100-115 and because of poor response, the price fixed was Rs 100 with a discount of Rs 5 to retail investors. The previous three power issues in this year have fared poorly post listing, and the listing of JSW Energy would be keenly awaited. JSW Energy was an issue which had virtually poor response in all the categories because of it’s over pricing and this forced a bailout of the issue from LIC and ICICI. The pricing of the issue at the lower end was a big climb down for the company and the stock listing and remaining above par is of paramount importance not only for JSW Energy but also for the power sector companies.
Quite a few issues from the power sector are in the pipeline including mega issues from the PSU stable as well. Follow on public offers from NTPC and REC from the PSU stable will be keenly watched considering the debacle of NHPC.
The second listing is of Godrej Properties Limited which raised Rs 462 crs. The price band was Rs 490-530 and was priced at the lower end of Rs 490. The issue received adequate response only from QIB’s and was under subscribed in the other categories. This real estate developer has a unique business model where he does not own land banks but does joint development with the land owner. With more than half a dozen real estate developers waiting to tap the markets post mid January, the success of this issue is imperative for the remaining real estate developers going forward. Some of the issues pending or waiting to be launched include Lodha Developers, Kumar Builders, Emaar MGF, Sahara and many others waiting for the right time.
The third IPO to list is the media house company DB Corp Limited, the publishers of Dainik Bhaskar, Divya Bhaskar and Business Bhaskar. This issue was in a price band of Rs 185-212 and was very well subscribed in all categories. The issue was subscribed about 40 times, and raised Rs 383 crs. The issue was priced at Rs 212 and retail investors were given a discount of Rs 2 per share. The share enjoys a healthy premium in the grey market and should be one of the well performing shares on listing.
With more than 50 issues waiting to be launched in the immediate future, I believe the success of these three issues is of paramount importance for the primary market. What fate has in store for us only God knows? Let us hope and pray for the best.
Best wishes for the New Year 2010.
