IPO News

Bharti Infratel – Lists 10% down, Stock under pressure trades at Rs 195-196

December 28th, 2012 Comments Off

BhartiInfratel Limited (BIL) listed its shares on the BSE and NSE and has listing ceremonies simultaneously on both exchanges. The share however was a disaster on expected lines. The company had offered shares in a price band of Rs 210-240 with a discount of Rs 10 to retail investors. The issue which consisted of a fresh issue and an offer for sale was for 18.89 cr shares and was priced at Rs 220. Incidentally the anchor allocation was done at Rs 230 per share.

The discovered price was Rs 200 and within minutes the price fell to Rs 195. The low of the day on the BSE was Rs 192.80 while on the NSE it was Rs 192.00. The share has been under pressure and this is despite the fact that retail and HNI’s chose to ignore the issue and subscribed their portion a mere 22%. One wonders that ‘intelligent QIB’s’ discovered the price at Rs 220 and chose to panic on day one at under Rs 200.

Exchange	Open	High	Low	Close	Net Change	%Gain/Loss	Wt. Avg	Volume
BSE	200.00	200.00	192.80	195.55	-24.45	-11.11	196.45	6885970
NSE	200.00	200.85	192.00	192.45	-24.55	-11.16	196.39	19269125
Total								26155095

In the first two hours of trade the share has seen a total volume of 261.55 lacs which is 13.84% of the IPO size. The weighted average of the day is at Rs 196.45 on the BSE and Rs 196.39 on the NSE. So far history has been re-written as far as Bharti is concerned. The retail investor must be complimented for the fact that with three back to back issues he wholeheartedly subscribed to the first two which are trading at a premium and chose to ignore the third which is trading at a discount. It speaks volumes for the retail investor’s ability to spot what is good for him unlike what the management of the issuer may feel.

The performance at the end of the day and delivery figures would be keenly observed and analysed to decide the future trend of this share in the short to medium term.

PC Jeweller Limited –Marginal listing but great finish as Share closes with gains of 10%

December 28th, 2012 Comments Off

PC Jeweller Limited (PCJ) listed on the BSE where it had a listing ceremony and on the NSE yesterday. The discovered price was Rs 135.50 on the BSE against the issue price of Rs 135. Incidentally there was a discount of Rs 5 for retail investors which made the allotment price for them as Rs 130. The opening price on the NSE was higher at Rs 137. The opening prices itself were the lows on both the exchanges. The share price was on a roll thereafter and rose to make a high of Rs 154.75 on the BSE and Rs 154.70 on the NSE. The share closed with decent gains of Rs 14 on the BSE at Rs 149 and marginally higher at Rs 149.20 on the NSE.

PCJ had tapped the capital markets with its issue for 451.33 cr shares in a price band of Rs 125-135. The issue was oversubscribed 6.85 times with the QIB portion subscribed 7.33 times and the HNI portion subscribed 18.12 times. The retail portion was subscribed 1.68 times with a difference. Investors have started understanding the new rules of allotment in the retail category where every applicant is first allotted the minimum lot and in case shares remain then only is higher allotment done. In the case of PCJ the retail portion was 1,56,71,250 shares or there could be 1,74,125 applicants who got the minimum shares. There were more applicants than this number and hence every applicant got just the minimum number of shares. This also effectively reduces the oversubscription in the retail category. Whether the system is good or bad would continue to be debated for some time. However what is clear is that in fancied stocks the subscription pattern would be similar while in less fancied stocks one would have to see how investors react.

Coming back to the listing day, 53.34 lac shares (20 lacs on BSE and 33.34 lacs on the NSE) were purchased by DVI Fund Mauritius at a total cost of Rs 76.09 crs. The above mentioned fund was also an anchor invested and was allotted 7.21 lac shares or 10.75% of the anchor book. Besides the above name there is no other buyer or seller mentioned in the bulk trades category of BSE and NSE.

Exchange	Open	High	Low	Close	Net Change	%Gain/Loss	Wt. Avg	Volume	Delivery	Del %age
BSE	135.50	154.75	135.50	149.00	14.00	10.37	146.64	28612722	6625439	23.16
NSE	137.00	154.70	137.00	149.20	14.20	10.52	147.50	64704244	14154594	21.88
Total								93316966	20780033	22.27

From the table above one is able to see that the total traded quantity on the exchange was 933.17 lac shares which was 2.07 times the IPO size.The total delivery quantity was 207.80 lac shares which was a healthy 46% of the IPO size. The weighted average of the day’s trade was Rs 146.64 on the BSE and Rs 147.50 on the NSE, both below the closing price of the day. This signifies that there was no significant selling pressure on the scrip at any time. Investors have received a comfortable exit and non-retail investors have made 10% while retail investors have made about 14%.

The share is likely to continue to trade in positive territory for some time and one would have to see what other successful applicants do.

In conclusion a good listing in which there have been decent listing gains made by all categories of investors. The stand of the website in urging investors to subscribe to the issue has been vindicated.

Bharti Infratel Limited Listing Day– Will history repeat itself ?

December 27th, 2012 Comments Off

Shares of Bharti Infratel(BIL) will list on the BSE and NSE on Friday the 28th of December and this would be the last of the three back to back issues. The question uppermost in mind would be the fate of BIL on listing day.When BhartiAirtel which had issued shares in January-February 2002, listed on the 18th of February 2002 they traded and closed at a discount on day one. Against an issue price of Rs 45 the share closed below par on day one itself. Thereafter it bottomed out only 11 months later in January 2003 (price Rs 20.65) and traded at par or above par in July 2003.

It took a great company like BhartiAirtel all of 19 months to bottom out and offer investors some returns. What is the assurance that BIL would be any better or better? I am sceptical about the performance of the issue post listing and the fact that 13 merchant bankers and 3 more syndicate members put together were unable to get the HNI and retail investors to subscribe is a cause for concern.

The price band was Rs 210-240 with a retail discount of Rs 10. The issue was priced at Rs 220 which means the retail allocation was at Rs 210. The non-retail price of Rs 220 is significant as this was the price Rs 219.38 to be precise at which PE investors invested in Bharti Infratel in March 2008. In rupee terms other than the dividends given by the company there has been no gain for investors in 57 months. However in dollar terms there has been a substantial loss as the investment was made at a rupee dollar parity of 39 while currently the currency has depreciated to 54-55 to the dollar.

My question to investors is when we as a category or class of people have not made money in the issue of BhartiAirtel in 18 months after the issue listed, PE investors have not made money even 57 months after listing, why should we expect to make money from the Bhartis ?

I think the answer is there for all and my strong advice to investors is let the share list and trade. In course of time the share will settle at a stable price. Then and only then look at buying the share. Simply avoid for now.

Bharti Infratel – Lists 10% down, Stock under pressure trades at Rs 195-196

Bharti Infratel Limited Listing Day– Will history repeat itself ?

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