Shares of Prabhat Dairy Limited were listed on the bourses on Monday. The company had a torrid time raising the equity that it had proposed. The original issue was for a simultaneous issue of fresh equity to raise Rs 300 crs and an offer for sale of 1,47,06,000 shares. The offer price was in a band of Rs 140-147. The markets took a beating and there was no anchor subscription. The issue received a tepid response and the price band was reduced substantially to Rs 115-126. There was also a discount of Rs 5 to retail investors. The issue at the above price band of Rs 140-147 would have raised Rs 506 -516 crs.

The subscription even after the reduced price was not enough to ensure a sold out issue and the offer for sale portion had to be reduced to technically close the issue. At final count the company allotted a total of 3,11,62,716 shares at Rs 115 and collected Rs 358.37 crs. The reduction in collection was a massive 148 crs or 29% of the original amount at the lower end of the price band. This entire reduction would have to be suffered by the selling shareholders as fresh issue of Rs 300 crs by the company had to be met first.

Coming to the listing day itself where the discovered price on the NSE was 113 and 6.68 lac shares were traded at that time. The discovered price on BSE was Rs 115 and 1.69 lac shares were traded. At the end of the day the treaded shares on the BSE were 22.25 lacs and on the NSE 65.53 lac shares. The total traded shares at 87.79 lacs was 28.17% of the allotted shares. The delivery volume on day one was 32.08 lac shares which was 36.55% of the traded shares and 10.29% of the issue size. The issue managed to eke out gains on day one and close above par. The share closed at Rs 116.35 or 1.31% higher at BSE and Rs 115.95 or 0.92% higher at the NSE. Delivery data showed that one institutional investor bought 11,92,913 shares at a rate of Rs 117.02 on the NSE. There was no other name disclosed.

This was the last of the five back to back IPO’s which came in the second fortnight of August. There have been no issues after this and though the pipeline is strong it appears people are waiting for the right time so that they may price the issue accordingly. Prabhat Dairy Limited survived the first day and retail investors earned the entire Rs 5 discount offered to them. There were a total of 33,403 applicants who were allotted 43,81,290 shares or an average of 131 shares.

The market needs one bumper issue where all investors make money on listing before all other sins of earlier issues will be forgotten. Which will be that issue is the million dollar question? Till then pricing will be less aggressive that what has been seen.