IPOs: Retail investors get choosy

Retail investors are now acting smart from bad experience they got in initial public offers (IPO) in past.
 
So far in 2010, of all companies that tapped the primary markets through Initial Public Offer (IPO) route, eight have managed to raise Rs 2,741 crore.
 
Amongst them, Emmbi Polyarns, Vascon Engineers, Thangamayil Jewellery and D B Realty that got listed in current month where the retail portion was undersubscribed, are currently trading below their issue price.
 
The worst of the lot is Emmbi Polyarns that made its debut today at Rs 45.50 against the issue price of Rs 45, finally settled at Rs 29.35, 35 per cent below its offer price. The retail portion of the IPO was subscribed by only 0.41 times.
 
While Vascon Engineers and Thangamayil Jewellery are trading at a 16 per cent discount to their respective issue prices, DB Realty’s performance has comparatively been better. The stock currently trades just 3 per cent lower than its issue price of Rs 468. The retail portion of DB Realty was subscribed by just 0.35 times as compared to overall subscription of 2.63 times.

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