The IPO of Jaypee Infratech Limited which opened for subscription on Thursday the 29th of April and closes on Tuesday the 4th of May was subscribed to the extent of 0.87 times the issue size at the end of day 2. The price band is between Rs 102-117 and the book is being built around the lower end of the price band around Rs 102-103.

Retail investors would do well to apply at a specific price instead of applying at cut off. If one were to apply at cut off the maximum application for retail investor would be 850 shares at an investment of Rs 99450. If however he put in a specific bid at say Rs 105 he would be able to apply for 950 shares with an investment of Rs 99750. There could be an argument that with the book being built at Rs 102-103 why bid at Rs 105? The argument is perfectly valid but the fact is that even at Rs 104, Rs 103 or Rs 102 the quantity of shares bid would not change and it would remain at 950 shares but the amount paid would change marginally.

The price bid at Rs 105 by retail investors ensures maximum utilisation of the 1 lac limit and also ensures that the price bid is effectively bidding at cut off. The current book has 85% of the bids at Rs 103-102 and it appears the book would more or less come at this price.

In conclusion retail investors should bid at Rs 105 instead of cut off price.