Inventure Growth & Securities IPO Subscribed

Inventure Growth & Securities Limited which had tapped the capital markets with its IPO for 70 lac shares in a price band of Rs 100-117 was subscribed. The issue had opened for subscription on the 20th of July and closed on the 22nd of July. The company would raise Rs 81.90 crs at the upper end of the price band.

The company received poor response from QIB’s and remained undersubscribed with bids for a mere 25% received. The issue was supported by HNI’s and retail who subscribed the issue 9.49 times and 8.66 times respectively. It is indeed surprising that when the broking industry is going downhill, and only day before the largest arbitrage firm has shut down, why there is such enthusiasm in the issue. Secondly the valuations which are close to 40 times the fully diluted earnings per share against just about 10 times that of large listed players Motilal Oswal and Edelweiss, is certainly a mystery.

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

Category  Shares Offered Shares Subscribed Times
QIB 3500000 870900 0.25
NII 1050000 9964800 9.49
Retail 2450000 21219800 8.66
Overall 7000000 32055500 4.58

The quality of issues hitting the capital markets has taken a severe beating in recent quarters and the performance of these issues post listing shows that things are not as rosy as the listing day prices.

One hopes that L&T Finance Holdings IPO may give some fillip to the primary market and give the starved investors of quality issues something to talk about.

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