Shares of ICICI Securities Limited (ISEC) listed on the bourses and cut a very sorry figure for themselves. The offer for sale from the company received a poor response and the listing even poorer. The company had tapped the capital markets with its offer for sale for 7,72,49,508 shares in a price band of Rs 519-520. It had earlier allotted 3,30,24,165 equity shares to 33 anchor investors comprising of 58 entities. The highest allocation was done to Pioneer Investment Fund who has been allotted 31,73,100 shares or 9.61% of the anchor allocation.

The issue remained undersubscribed and could garner just 3,520 crs including Rs 1,717 crs from anchor investors. While HAL priced the issue at the lower end of the price band when they got 0.99 times subscribed, ISEC kept its false prestige intact by not pricing it at the lower end of the price band, even though it was a difference of just one rupee.

Coming to the actual subscription, three of the four categories were undersubscribed. The HNI portion was subscribed 0.36 times, Retail 0.88 times and shareholder reservation 0.34 times. The much-touted institution or QIB portion was just about subscribed at 1.04 times. This made an overall subscription of 0.78 times.

Listing day was yet another story. The discovered price on the BSE was Rs 431.10 and Rs 435 on the NSE. This was a steep loss of Rs 89 on the BSE and Rs 85 on the NSE or in percentage terms over 16%. The high of the day was Rs 462.70 and Rs 463 respectively. The open was the low on both exchanges. The close was Rs 445.05 on the BSE, a loss of Rs 74.95 or 14.41% while it was Rs 445.10, a loss of Rs 74.90 or or 14.40% on the NSE. The weighted average of the day was Rs 449.85 on the BSE and Rs 450.46 which was way above the closing prices.

The traded volume on the two exchanges combined was a mere 87.33 lac shares which was 12.90% of the final IPO size of 676.99 lac shares. Delivery volume was 8.73 lac shares which was 18.62% of the traded volume but 2.40% of the IPO size. The traded volume as a percentage of non-anchor portion was 25.19% and delivery volume 4.69%. This indicates that a lot of further delivery must happen to adsorb the free float.

This is the third offering from the ICICI stable and the second to have a poor listing after ICICI Prudential. That issue was sold at Rs 334 and closed at Rs 297.65, a loss of Rs 36.35 or 10.88%. The issue in between from ICICI Lombard made money for investors closing at Rs 681.55 against an issue price of Rs 661. The gain was Rs 20.55 or a tad above 3%.

Its time merchant bankers started realising that it makes sense to leave something on the table for investors so that the interest in the primary markets remain intact. Having an army of merchant bankers, and not being able to get the issue subscribed was an issue by itself. This poor listing performance becomes another issue and more price damage is yet to follow as delivery volumes are too meagre on day one.

Poor pricing and apt fate for an overpriced issue.