Tribhovandas Bhimji Zaveri better known as TBZ which had tapped the capital markets with its IPO for 166.67 lac shares just about managed to get subscribed. The issue was open from Tuesday the 24th of April till Thursday the 26th April. The price band was Rs 120-126. The company had done an anchor investor of 4,99,999 equity shares at the lower end of the price band of Rs 120. This has weighed on the minds of investors on the last day and a large chunk of applications have come from investors at the lower end of the price. A little over 50 lac shares have been applied for at the lower price band of Rs 120. Looking at this bidding pattern one is sure that the price at which the company would allot shares would beat the lowest price i.e. Rs 120 per share.
This brings us to a very important point that fundamentals, brand and the fact that the company is 146 years old helps in proving the credentials of the company but does not mean that at any price the company would be good. Promoters in particular and merchant bankers who are supposed to be their interested advisors must understand that the investor has been badly burnt in recent issues. He is scared of investing and would use a very basic policy of ‘when in doubt – avoid’. I believe there are enough examples of this in the past and TBZ would be the latest example of the same. A 146 year old brand whose fundamentals are not in doubt, the business is doing decently, but the asking price was exorbitant. Net result with arquee merchant bankers, the issue just about made it and probably had to garner support on the last day.
The issue was overall subscribed 1.15 times.
The details of the subscription level in various categories are given below: –
|Category||Shares Offered||Shares Subscribed||Times|
One hopes promoters and merchant bankers start learning the fine art of proper pricing. A good issue is one where there is decent response and expectations of applicants who subsequently become investors are met. A risk taker expects to be rewarded for his confidence in the company and this is something which promoters and merchant bankers must respect and reward shareholders and risk takers with.