The issue from Precision Camshafts Limited which comprised of a fresh issue of Rs 240 crs and a secondary offering of 91.5 lac shares in a price band of Rs 180-186 was oversubscribed. This incidentally was the first issue where it was mandatory for retail investors to compulsorily apply through ASBA. While the retail portion was subscribed 2.01 times it remains to be seen post blocking of money by the banks, what percentage of forms would get rejected. Rejection could be for various reasons including non-acceptance by the banks, inadequate funds, signature not matching and the fact that the syndicate member is unable to physically reach the form to the bank in question.

Details of subscription category wise are appended below: –

Yet again one sees that the HNI portion has not been subscribed and there is one simple reason that there was not enough grey market activity to get the margin percentage down to a comfort zone for them to apply. This category because of leverage distorts demand and causes a mismatch in price and demand. Its high time SEBI looked at this issue and prohibited HNI’s from bidding more than their issue size.

It would be interesting to see how many applications are finally accepted and rejected to gauge the success or failure of the ASBA system.