Promoter group buys 197.8 lakh shares or 2.63% of IPO size to no avail
Future Ventures India Limited listed on the BSE and NSE on Tuesday the 10th of May 2011. The listing or opening price on the BSE was Rs 9.50 and on the NSE was Rs 9. The open on the BSE was the high while on the NSE the high was Rs 9.65. The low was Rs 7.95 on the BSE and Rs 7.90 on the NSE.
The company had tapped the capital markets with its IPO to raise Rs 750 crs in a price band of Rs 10-11. The issue was subscribed 1.52 times with the help of HNI’s who subscribed the issue 7.92 times. QIB portion was undersubscribed with a mere 26% of the reservation being subscribed, while retail chose to subscribe to just about 61% of the offer. The CMD of the group Mr Kishore Biyani was disappointed with the response to the issue and had expressed the same in interviews on television. Probably he was expecting that with oversubscription he would have been able to price the issue at the upper end of the price band and charge investors Rs 11. This disappointment at having to issue 75 cr shares at Rs 10 instead of issuing 6.82 cr shares at Rs 11 is where the pain is.
| Exchange |
Open |
High |
Low |
Close |
Net Change |
% Gain/loss |
Wt. Avg |
Volume |
Delivery |
Del %age |
| BSE |
9.50 |
9.50 |
7.95 |
8.30 |
-1.70 |
-17.00 |
8.54 |
76001845 |
26877530 |
35.36 |
| NSE |
9.00 |
9.65 |
7.90 |
8.20 |
-1.80 |
-18.00 |
8.54 |
174748460 |
59442414 |
34.02 |
| Total |
|
250750305 |
86319944 |
34.42 |
The share saw huge trading interest and a total of 2507.50 lakh shares were traded which is just over 1/3rd the issue size of 7500 lac shares. The delivery volume was 863.19 lac shares which was 34.42% of the traded volume and 11.51% of the IPO size. The weighted average of the day’s trade was Rs 8.54. The share closed at Rs 8.30 on the BSE, a loss of Rs 1.70 or 17%, while on the NSE it closed at Rs 8.20, a loss of Rs 1.80 or 18%. This is the second consecutive offering from the Future Group where investors have lost a bomb.
From the above chart one can see that the share was falling all the way till 1.30 pm at which time it made a small recovery in the next 15 minutes but was unable to sustain. It again began its fall and made the low of the day at around 2.45pm. IT is also interesting to note that the promoter group has made fresh investments in the company on the opening day. Two of the group companies have bought shares in the company at a price which is lower than the issue price. Pantaloon Industries Limited bought 98,25,000 shares at Rs 8.48 while Pantaloon Retail Limited bought 99,59,095 shares at Rs 8.35 on the NSE. On the sell side Credit Suisse Singapore sold 1,61,36,400 shares at Rs 8.72 per share.
Very clearly in yet another issue investors have lost money on day one and the loss of 18% is significant. At the road show in Mumbai the group chairman had highlighted that the share was being offered at par as an indirect softener to the loss suffered by investors in the issue of Future Capital Holdings Limited. This issue has become yet another disaster and the group would do well to meet analysts and atleast explain the business model and give a sense of future revenues and earnings, now that the IPO phase is over. I believe this would atleast bring some clarity in the minds of investors and analysts about what to expect from Future Ventures India Limited.
