| Name | Date of Listing | Issue Price | closing price | closing price | % gain loss | change over |
| 9th Sept | 2nd Sept | over week | lssue price | |||
| Inventure Growth & Securities | 4th Aug | 117.00 | 148.25 | 144.50 | 2.60 | 26.71 |
| L&T Finance Holdings | 12th Aug | 52.00 | 50.80 | 50.45 | 0.69 | -2.31 |
| Tree House Education & Acessories | 26th Aug | 135.00 | 122.80 | 125.25 | -1.96 | -9.04 |
| Brooks Laboratories | 5th Sept | 100.00 | 42.10 | N A | -57.90 | -57.90 |
| TD Power Systems | 8th Sept | 256.00 | 305.90 | 19.49 | 19.49 |
Performance of Newly Listed Shares as on9th September 2011
September 12th, 2011
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Brooks Laboratories Creates Dubious history: Deliveries are higher than IPO size yet shortage auction does not happen.
September 12th, 2011
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WHODUNIT?
Shares of Brooks Laboratories Limited listed on Monday the 5th of September at the BSE and NSE. I believe nobody was aware that a dubious history was being created on that day. The company had tapped the capital markets with its IPO to raise Rs 63 crs in a price band of Rs 90-100. The issue received no bids from QIB’s but was subscribed to by HNI’s and retail investors and overall subscribed 1.6 times. The company priced the issue at the top end of the price band of Rs 100 and accordingly the issue was for 63 lac shares at Rs 100.
The dubious history part is that for an issue of 63 lakh shares the total combined delivery on the BSE and NSE was more than the IPO size. The traded volume on the BSE was 3,03,47,260 shares and of this 26,88,620 shares were marked for delivery. On the NSE the total traded volume was 4,43,05,878 shares and of these 36,57,424 shares were marked for delivery. The total shares marked for delivery were 63,46,044 equity shares which is 46,044 equity shares higher than the IPO size. Till date in the last 5 years or thereabout one has not heard of any such event. The higher deliveries range in the region of 88% to 91% and even there one does see some auctions.
The stunning part of this figure is not he quantity marked for delivery but the shortfall and thereafter the auction which takes place. The auction was for a mere 61 shares on both the exchanges combined. This number does not make sense. Has the quantity marked for delivery changed or the quantity of shares issued were more than the 63 lac shares which were supposed to be issued. These questions need to be answered by the two exchanges because the share had a very inauspicious end on the listing day. The share which was issued at Rs 100 made a high of Rs 131.10, a low of Rs 57.75 and closed at Rs 60.20, a loss of 40% on day one. The share has lost further ground during the week and closed at Rs 42.10, a weekly loss of Rs 57.90 or effectively 58% during the week. The intraday chart of the listing day is enclosed below.
It is important for the two exchanges to clarify if there is any change in deliveries or shortages as it affects the market. It may also be noted that in normal trade itself there is some shortage which happens and leads to auction. In this case even with an apparent shortage of over 46,000 shares there was no matching auction. There is no apparent answer and the whole event Is baffling and is just not logical. One only hopes that in the interest of the stock market the exchanges clarify the situation so that one does not come to funny and illogical conclusions.
Until the time the issue is clarified one would treat this issue as one of those mystery movies which seems just improbable.
Religare Finvest: Attractive yield offering highest coupon rate: SUBSCRIBE
September 12th, 2011
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Religare Finvest Limited is tapping the bonds market with an issue of Rs 400 crs and an oversubscription of Rs 400 crs, making the total size of the bond issue Rs 800 crs. The bond issue will be of two maturity periods of 3 years and 5 years. The coupon rates will vary from 12% to 12.5% depending upon the category and the duration. As ofdate this is the highest coupon rate being offered by any issuer in the AA- category of rating. This has probably being done keeping in mind that RBI is likely to revise interest rates in their meeting on Friday the 16th of September. The issue has opened on Friday the 9th of September and would close on Monday the 26th of September or earlier.
| Issue Size | Rs 400 crs plus oversubscription Rs 400 crs – Total Rs 800 crs |
| Period of Bond | 2 options of 3 years and 5 years |
| Coupon Rate Category I | 12% per annum and 12.10% per annum |
| Coupon Rate Category II | 12.15% per annum and 12.25% per annum |
| Coupon Rate Category III | 12.25% per annum and 12.50% per annum |
| Category I or Institutional Portion | QIB’s |
| Category II or Non-Institutional Portion | Bodies Corporates and Firms and HNI’s who apply above Rs 5 lacs |
| Category III | Resident Indian Individuals and HUF’s – application to be above 5 lakhs |
| Category III Reserved Portion | Resident Indian Individuals and HUF’s – application to be upto 5 lakhs |
| Reservation Category I | 20% of issue or upto 160 crs |
| Reservation Category II | 30% of issue or upto 240 crs |
| Reservation Category III | 50% of issue or upto Rs 400 crs |
| Lead Managers to the Issue | A K Capital Services Limited |
| Axis Bank Limited | |
| Yes Bank Limited | |
| Religare Capital Markets Limited | |
| Isssue Opening Date | Friday 9th September |
| Isssue closing date | Monday 26th September |
| Credit Rating | ICRA AA-(Stable) and CARE AA- |
| Bid Lot | 10 bonds |
| Bidding Amount for Retail | 500 bonds of Rs 1000 each or 5 lakhs |
| Listing of Bonds | Bombay Stock Exchange |
| Interest on Application | 8% per annum on application |
| 8% per annum on allotment | |
| Allotment | On first come first served basis |
The company ReligareFinvest Limited is a subsidiary of the listed entity Religare Enterprises Limited. The market capitalisation of the listed entity is Rs 5716 crs. As of now on a consolidated basis the listed entity is a loss making company and reported net losses of Rs 295 crs for the year ended March 2011. As far as the company raising the bonds or issuing the bonds is concerned it is a healthy profit making company and made a net profit of Rs 114.77 crs for the year ended March 2011.
The brief financials of the company show that the total income in the year ended March 2010 was Rs 536.16 crs which has more than doubled to Rs 1,163.15 crs in the year ended March 2011. The net profit during the same period has grown from Rs 102.82 crs to Rs 114.77 crs.
There is a very strong belief that the interest rate cycle is almost at its peak and probably after the last round of interest rate hikes in the next week, there is every likelihood that there would be no further rate hikes and gradually there could be some easing as well. Considering this general consensus feeling all over it would be fair to assume that for investors this would be a great opportunity to invest in bonds with a coupon rate of 12.5%. Once the interest rates start easing these instruments would trade at a premium and help in making some more money. One may also remember that the current situation in the equity markets is also not very conducive and making money is difficult to say the least. In such trying circumstances it may be a good idea to invest in the bond issue and when the markets start improving and interest rates start easing to sell the bonds and enter the market.
SEBI Disclaimer: – I intend to apply to the above bond issue.
