Gujarat Pipavav Port Limited is to list on 8th September on the NSE and BSE. The company had tapped the capital markets with an issue to raise 510 crs and an offer for sale of 1.17 cr shares in a price band of Rs 42-48. The issue was open between the 23rd and 26th of August 2010. The issue received excellent response from all categories of investors and was over-subscribed just under 20 times.

HNI’s have whole heartedly subscribed to the issue and there has been a lot of funding used for the same. The final allotment figures show that a retail investor who applied for the maximum permissible 2080 shares has been allotted 218 shares. In the HNI category an application for 19,760 shares has received an almost similar allotment of 219 shares. The cost of funding this application considering an interest component of 10% and for a period of 9 days would mean an interest cost of Rs 10.68 paisa. If the duration increases by one day to 10 days the same would change and become 11.86 per share.

This interest cost becomes the insurance or minimum target price for retail investors. The price on listing day should move in a range of Rs 55 to Rs 60 which would give retail investors an average profit of between Rs 2000 to Rs 3000 in a space of a mere 12 days. The proper pricing of issues will help in reviving the interest of retail in primary markets and looking at the pipeline where about 10-15 issues are in the opening stage in the next 30 days; this interest revival is of paramount interest.