Fineotex Chemical Limited which had tapped the capital markets with its IPO which opened on Wednesday the 23rd of February and closed on Friday the 25th of February “Managed” its subscription. The company had offered for issue 42.11 lakh shares in a price band of Rs 60 to Rs 72. The company would raise Rs 30.32 crs at the top end of the price band.

The stellar point of this issue is that there is not a single share subscribed to by the institutional investors and even HNI portion remained unsubscribed with a mere 22% subscription. The entire subscription has come from the retail category which was oversubscribed 4.38 times. It is of interest that what the retail investor saw in this issue that he is the only category of subscriber in the same.

The company chose not to have any road show in Mumbai or any other place to market or talk about the issue. It is indeed sad that companies with virtually no fundamentals are tapping the capital markets with the help of outside people at a huge cost to themselves. The end of these so called ‘managed’ issues is always the same with the investor who is left holding the baby paying for the same. Its time retail investors looked into the matter and realise that the risks involved are not worth the possible returns.

The details of the subscription level in various categories are given below: –

The merchant banker for this issue was a PSU bank’s investment banking arm namely Indbank Merchant Banking Services Limited, and there failure to attract even a single share in the QIB category indicates the strength and the fundamentals of the company. SEBI has proposed to start giving track record of merchant bankers in the RHP as well. The early introduction of the same would go a long way in risk mitigation for investors.