Adani Power, NHPC shares close below issue price

The shares of Adani Power Ltd. (APL) and public sector hydro power producer NHPC, which were listed after two of the largest initial public offers (IPOs) this year, closed below their issue price for the first time today even as the key equity benchmark index, the Bombay Stock Exchange (BSE) Sensitivity Index (Sensex), rose 1.89 percent.

APL shares fell 1.45 per cent to close at Rs 98.60 while NHPC fell 2.35 per cent to close at Rs 35.25 on BSE. The APL IPO was priced at Rs 100. The shares were listed on the bourses on August 20. NHPC shares were listed on September 1. The IPO price was Rs 36 per share.

“Huge selling was seen from high networth individuals. All those who had applied for shares in the IPO using margin funding are sitting on huge losses. This has had a bad impact on investor sentiment. However, there is also a lot of consolidation at lower levels and according to our estimates, a majority of qualified institutional buyers and large institutions are holding on,” said Kishor Oswal, chairman and managing director of CNI Research.

“Both the issues were poorly planned and there was absolutely nothing in it for investors in the short run,” said Deven Choksey, managing director of KR Choksey Shares and Securities.

While the impact of this could be felt on other IPOs, market players said Oil India’s (OIL’s) was a fairly priced issue.

“It is likely that the subscription for coming IPOs may fall. However, I believe that OIL is fairly priced as the company’s earnings per share is Rs 100. The past two IPOs had significantly lower earnings per share,” said Nirmal Jain, chairman and managing director of India Infoline.