United Bank of India IPO Subscribed: Receives excellent response

February 26th, 2010 Comments Off on United Bank of India IPO Subscribed: Receives excellent response

United Bank of India which had tapped the capital markets with a public issue in the price band of Rs 60-66 received overwhelming support. The issue was subscribed over 33 times. Retail investors were offered a discount of Rs 3 per share and even the retail category was subscribed just under 10 times.

Category Shares offered Shares Bid Subscription Ratio
QIB 28500000 1341847100 47.0824
NII 4750000 185974500 39.1525
Retail 14250000 139704100 9.8038
Employee 2500000 1325200 0.5301
TOTAL 50000000 1668850900 33.38

The subscription clearly shows that there is appetite for fresh paper as long as there is money on the table. Pricing is the key and all should appreciate that there is plenty of information available about every IPO. Mere subscription by QIB’s and HNI’s does not guarantee results or returns post listing. The success of an issue needs retail participation and I believe the time has come for all intermediaries and players connected to the capital markets, to appreciate this fact. The retail segment accounts for 30-35% of the issue size but in terms of number of shareholders he accounts for in excess of 95% of the public shareholders at the bare minimum.

This fact and that post listing the retail adds the colour and the flavour should be borne in mind. Retail loves to apply in issues and like his seniors and more knowledgeable QIB’s wants to encash profits on day one.

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Emmbi Polyarns Day one Listing: Complete Mayhem–Share Battered

February 25th, 2010 1 Comment

Emmbi Polyarns Limited had a decent listing. Alas it was only the listing that was decent. Somewhere during the day huge selling emerged and the share was hammered out of shape. It ended the day badly bruised. I am not sure whether one can compare Emmbi with the way the South African bowlers must have felt with that hurricane innings of 200 not out played by Sachin Tendulkar to become the highest scorer in one day cricket and also the first to get a double ton.


Coming back to Emmbi, the shares were issued in a price band of Rs 40-45 and the issue was subscribed 1.2 times. The price was fixed at Rs 45 and a total of 95 lakh shares were issued. The share listed on the BSE at Rs 45.50 and made a high of Rs 48.35. Thereafter came the crash and the stock touched a low of Rs 26.50 before finally closing at Rs 28.65. On the NSE it opened at Rs 46 and then made a high of Rs 48.30. It fell all the way to Rs 26.65 and closed at Rs 28.75.

Exchange Open High Low  Close Net Change % gain Wt Avg Volume Delivery Del % age
BSE 45.50 48.35 26.50 28.65 -16.35 -36.33 39.76 57173030 3152094 5.51
NSE 46.00 48.30 26.65 28.75 -16.25 -36.11 38.14 61482682 4953537 8.06
Total 118655712 8105631 6.83

The share reported very high volumes which were 11.86 lakh shares or 12.1 times the IPO size of 95 lakh shares. The delivery percentage has set a new record as was being anticipated yesterday. 81 lakh shares or 6.83% were delivered. However when one looks at the same delivery volume of 8105631 shares as a percentage of the IPO, it is 85.32%, which can only be described as huge. This clearly shows that the issue did not merit attention and the way the share has listed and disappointed investors is clear that the share has simply been dumped on people who traded the share.

With the share down more than one third on day one, the future looks bleak and a lot of effort would have to be put in by the promoters in terms of performance and convincing to bring this share back in the limelight.

Even at this price, investors should not try bottom fishing.

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DB Realty Day one of listing

February 25th, 2010 Comments Off on DB Realty Day one of listing

Janus Contrarian fund saves complete embarrassment

DB Realty Limited listed yesterday on the BSE at a listing ceremony which was well attended. The stock opened lower and just kept on falling. It was only midway through the day that Anchor investor Janus stepped in and bought shares at an average price of about Rs 437.62, a discount of Rs 30.38 or 6.5% to the price of Rs 468 at which the company had allotted shares.

Coming to the listing itself, the stock opened at Rs 430 and made a low of Rs 412.50, before buying by Janus and huge support rallied the stock to make the days high of Rs 466.20. The stock closed at Rs 455.40 a small loss of 2.7%. On the NSE the stock opened at Rs 452.10, fell to Rs 412.45, made a high of Rs 467 and closed with a loss of 11.8% at Rs 456.20.

Exchange Open High Low  Close Net Change % gain Wt Avg Volume Delivery Del % age
BSE 430.00 466.20 412.50 455.40 -12.60 -2.69 440.43 20920602 2936337 14.04
NSE 452.10 467.00 412.45 456.20 -11.80 -2.52 439.87 25101889 4077632 16.24
Total 46022491 7013969 15.24

The company had issued shares in a price band of Rs 468-486 and raised Rs 1500 crs. The price discovered was the lower end of the price band of Rs 468 at which price the company issued and allotted 320 lakh shares. Volumes yesterday were quite decent and 4.60 cr shares or 1.44 times the IPO size was traded. Deliveries as a percentage of traded volume were 15.24%, a fairly low number. Total deliveries at 70.14 lakh shares were about 22% of the issued capital. As mentioned earlier the fresh buying by Janus has really helped the stock as they bought 33.82 lakh shares at an average price of Rs 437.6. There purchase is almost half of the deliveries which took place yesterday.

The share was expensive and the issue was very aggressively priced. Retail response to the issue was quite poor and overall it was tough going for the company. The promoters of the company had assured investors and analysts on the road show in Mumbai that they would hold an analyst meet in Mumbai to answer all questions regarding the company within 40 days of listing. Day one is over and a maximum of 39 more to go. Let’s hope they stick to their word and deliver.

The share took a beating on listing yesterday and survived a massive scare because of fund buying. The share is looking weak and unless someone continues to support or buy today, the share could crack.

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