Future Ventures India Listing is way below expectation: Trades 15% below issue price

May 10th, 2011 Comments Off on Future Ventures India Listing is way below expectation: Trades 15% below issue price

Future Ventures India Limited listed its shares on the BSE and NSE today. The share listed at the BSE at Rs 9.50 and at Rs 9 on the NSE. The high was Rs 9.50 on the BSE and Rs 9.65 on the NSE. The low was Rs 8.20 on the BSE and Rs 8.15 on the NSE. The share after two hours of trading is at Rs 8.40-8.50, down 15%.

Exchange Open High Low Close Net Change % Gain/loss Volume Wt. Avg
BSE 9.50 9.50 8.20 8.40 -1.60 -16.00 25885447 8.83
NSE 9.00 9.65 8.15 8.40 -1.60 -16.00 67331496 8.83
Total 93216943

The company had raised Rs 750 crs at a price of Rs 10 and the issue was subscribed by the efforts of HNI’s. The share has been under pressure from the minute it has listed and failed to touch the issue price also at any time. This clearly shows the lack of interest in the share and the faith that investors have in the company.

At 11.30 am the share has seen volumes of 932.16 lac shares which is 12.42% of the IPO size of 7500 lac shares issued by the company. The weighted average of the share is Rs 8.83 which itself is a discount of 11.7% against the issue price of Rs 10. Very clearly one more issue where the price was more than realistic and here the difficulty was that you cannot offer a share at a discount to the face value of the share. Hence Rs 10 was the lowest that the share could be offered at.

This issue could have been brought a little later when it had a NAV which was not at a discount to the issue price or the company had started generating profits at the net level.

Anyway its too late for all of this. The share is trading at Rs 8.40 which is a loss of R 1.60 or 16%. Indeeed it’s a sad reflection on the company and the share performance.

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Paramount Printpackaging IPO: Steady Listing and then last hour crash

May 10th, 2011 Comments Off on Paramount Printpackaging IPO: Steady Listing and then last hour crash

Share closes with a loss of Rs 8 or 23%

Shares of Paramount Printpackaging Limited listed at the BSE and NSE yesterday. The company had a listing ceremony on the BSE and the opening price on the BSE was Rs 35, while it was Rs 36.50 on the NSE. The high of the day was Rs 37.50 on the BSE and Rs 37.90 on the NSE. The low was Rs 24.60 on the BSE and Rs 24.80 on the NSE.

The issue was oversubscribed 3.92 times and received excellent response from retail and to a lesser extent from HNI’s. The QIB portion was undersubscribed with response for a mere 1/3rd of the quota getting subscribed. As a matter of fact retail subscribers put in money for 83.23% of the total subscription. The issue size was 1,30,94,175 equity shares in a price band of Rs 32-35 and at the upper price of Rs 35 which was the price finalised the company has raised Rs 45.83 crs.

Exchange Open High Low Close Net Change % Gain/loss Wt. Avg Volume Delivery Del %age
BSE 35.00 37.50 24.60 26.65 -8.35 -23.86 33.28 39340050 5761414 14.65
NSE 36.50 37.90 24.80 27.05 -7.95 -22.71 33.40 36769530 5000270 13.60
Total 76109580 10761684 14.14

The share traded in a narrow band of Rs 35-36 till 2 pm. Then the first attack on the share price came which saw the share falling to around 30.50 and recovering to just under Rs 35, and all of this happened in a mere 15 minutes but it was accompanied by huge volume. The second attack was more gradual and saw the share slowly declining to Rs 28 and then recovering to Rs 30. The last half hour of trading saw the share crashing to make the lows of Rs 24.60 and Rs 24.80 respectively. The weighted average close saw the price improve to Rs 26.65 on the BSE and Rs 27.05 on the NSE. The loss for the day on the BSE was Rs 8.35 or 23.86% and Rs 7.95 or 22.71% on the NSE.

Trading volumes were high and the combined volume was 761.09 lac shares which is 5.81 times the IPO size. The delivery volume was 107.61 lac shares which is 14.14% of the traded volume and 82.19% of the IPO size. The weighted average of the day’s traded volume is Rs 33.28 on the BSE and Rs 33.40 on the NSE. On the QIB front one of the two funds who had applied in the issue, have sold a portion of their allotment. Cresta Fund has sold 3,09,861 shares on the BSE against its allotment of 5,50,050 shares. Assuming retail investors have sold at the average they have lost money on their investment as the weighted average was roughly 5% below the issue price.

This does not appear to be the case as the volume in the share in the last 90 minutes of trade was very heavy and it is only when the share came under selling pressure that the volume increase and the price fell.

In short yet another listing where investors have lost money and retail investors who were the pillars of strength of the issue thinking that they would be given a safe exit by “friendly supporters” have lost their shirt if they have sold yesterday. In case they haven’t sold as yet, the possibility of losing more than the shirt looks more likely.

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Sanghvi Forging and Engineering IPO subscribed

May 10th, 2011 Comments Off on Sanghvi Forging and Engineering IPO subscribed

Sanghvi Forging and Engineering Limited which had tapped the capital markets with its IPO in a price band of Rs 80-85 was subscribed on the last day. The issue was for Rs 3690.02 lacs and the and at the lower end of the issue price band would consist of 46,12,525 shares while at the upper end of the price band would be 43,41,200 equity shares.

There were no bids from QIB’s and in the end it was the retail to a large extent and HNI’s partially who supported the issue. In fact it would not be incorrect to say that the entire issue got subscribed by retail alone and the oversubscription came from HNI’s.

The details of the subscription level in various categories are given below: –

Category Shares Offered Shares Subscribed Times
QIB 2306262 0 0
NII 691879 1260280 1.82
Retail 1614384 4736620 2.93
Overall 4612525 5996900 1.3

Yet another IPO is completed where the QIB’s have stayed away but retail investors have subscribed to the same very enthusiastically. Apparently the retail are having more knowledge of the issue and about the company then other categories of investors. I believe the temptation to make a few quick bucks from IPO listing or Listing gains is so appealing that people are prepared to lose the principal amount.

One wishes all the applicants in the above IPO all the best and I would sincerely hope and pray that God be with them.

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