Plastene India IPO withdrawn due to poor response

The initial public offer (IPO) of Plastene India was withdrawn on Tuesday due to poor investor response, amid weak secondary market conditions. The Rs 78-crore offering is the second IPO in May and the third in 2012 that failed to sail through.

Earlier this month, Samvardhana Motherson Finance had to pull out of its Rs 1,665-crore IPO, the largest since October 2010, due to poor response. Goodwill Hospital, too, had called off its IPO.

Plastene India, a manufacturer of bags and woven sacks, received less than 30 per cent bids for the 9.25 million shares on offer. The company received hardly any bids under the institutional investor and the retail category, while the wealthy investor category got subscribed 1.76 times, according to data on the National Stock Exchange.

ANOTHER ONE BITES THE DUST Plastene IPO is the latest issue to have got withdrawn
2012 IPO  withdrawals	Issue size (Rs cr)

Plastene IPO 84 Samvardhana
Motherson1,665 Goodwill Hospital62 Source: BS Research Bureau 

“The IPO has been called off due to unfavourable market conditions,” said an official at Motilal Oswal Investment Advisors, the lead manager to the issue. The official said the company will now look at raising money from strategic investors. According to market experts, weak secondary market conditions and losses in newly-listed IPOs is taking a toll on investor sentiment. India’s benchmark indices are down more than 10 per cent from their February highs.