90 per cent IPOs trading below issue price

The BS IPO meter, which tracks the movement of newly-listed stocks, has declined by 64 per cent from its all-time high of 671.48, reached on January 7, 2008, to close at 244.62 today. The index fell 30 per cent in the past one month from 350 on September 19.

No wonder, over 90 per cent of the new issues listed in 2008 and 80 per cent listed in 2007 are currently trading below their issue price. In other words, out of 146 IPOs, which were listed in 2007 and 2008, as many as 122 are trading below their issue price.
 

VALUE EROSION
	Price in Rs

% fall IssueOct 17, 08 Niraj Cement19020.2589.34 Porwal Auto Com7510.1586.47 Sejal Glass11524.3078.87 Tulsi Extrusion8518.2078.59 KNR Constructin17037.2978.06 Manaksia16036.7977.00 Nu Tek India19246.5075.78 Precision Pipes15037.4075.07 First Winner12532.6573.88 Future Capital765201.8573.61

These 122 IPOs, which collectively raised Rs 51,132 crore, have seen a value erosion of Rs 24,169 crore. This means, investors who continue to hold these shares till today have lost almost 47.3 per cent of their investment made in 2007 and 2008.

The remaining 24 stocks, which collectively raised Rs 7,521 crore, have now gone up by 43 per cent to Rs 10,733 crore. Out of these 24 IPOs, the market price of three has more than doubled, seven are trading at premiums between 50 and 100 per cent and the rest have gained between 1 and 50 per cent.

TCS, 3i Infotech, ABG Shipyard, Allcargo Global and Action Constructions are trading at single digit premium to their issue price on the Bombay Stock Exchange (BSE). Allied Digital, Glory Polyfilms and Shree Ashtavinayak are trading at over 100 per cent premium to their offer price.

Among the major IPO losers, Suzlon Energy, Tech Mahindra, Biocon, Sun TV, TV Today, Patni Computer Services, HT Media, Mahindra & Mahindra Financial Services, JP Hydropower and Shoppers Stop have decline by around 15 per cent from their issue price.

Reliance Power, Rural Electrification, IRB Infrastructure, Future Capital Holdings, BGR Energy, Edelweiss Capital and Brigade Enterprises, which have collected more than Rs 450 crore each from the public, are currently trading below their offer price.