History repeats itself
The IPO from NCML Industries Limited was withdrawn after being extended citing poor response from investors. The timing of the issue seems to be jinxed where exactly three years ago another IPO from Goodwill Hospital & Research Centre Limited was withdrawn. The issue from NCML was open from 29th December 2014 to 2nd January 2015 and the price band was Rs 100 to 120. The issue size was 60 lac shares and the issue was an offer for sale. Further the bucket size was a little odd with 10% for QIB’s, 27% for HNI’s and 63% for retail investors. The issue was extended to close on Friday the 9th of January and the issue price band was revised downwards to Rs 80-90.
The issue from Goodwill was to raise Rs62 crs in a p-rice band of Rs 175 to Rs 185. The issue was open from 30th December 2011 to 9th January 2012.The size of this issue and the dates that the issue was eventually open are similar in amount and virtually same for the dates. The similarity is striking and distinctly noticeable.
The issue from NCML was subscribed in the second attempt after extension of time in 2 out of 3 buckets namely QIB and HNI. The difficult part was the retail bucket which was also the largest at 63%. What went wrong?
The industry edible oil extraction is not in flavour and has not produced results in terms of appreciation for investors. KS Oil, Ruchi Soya, GokulRefoil, Raj Oil Mills are some of the names which come to mind where investors have lost money. Secondly for reasons best known to them the promoters and merchant bankers chose not to have any roadshows for the issue. Third fundamentals of the issue were certainly weak and the issue was an offer for sale. Finally as mentioned earlier the period probably seems jinxed.
All in all history repeats itself and yet another issue bites the dust.