Smaller IPOs face rough time as market slides

With the stock markets falling, four initial public offers (IPOs) that opened this week are facing rough times and finding it difficult to get investors.

Four IPOs that opened this week — Aqua Logistics Ltd, Thangamayil Jewellery , Syncom Healthcare and Vascon Engineers — are facing tough times after secondary markets developed serious cracks.

The Rs 150 crore Aqua Logistics IPO, which was to close today, was under subscribed. Latest National Stock Exchange figures show that only 40 per cent of the issue was subscribed. An official from Centrum Capital, investment banker to the IPO, said the issued closing has been extended to February 2. The price band has been revised to Rs 200-220 from the earlier band of Rs 220-230.

Among other IPOs that are open currently, Thangamayil Jewellery was subscribed only 31 per cent.

The Rs 28.75 crore issue closes on January 29 and the price band is set between Rs 70 and Rs 75.

The Rs 200 crore IPO of Vascon Engineers, which closes on January 29, was subscribed by 38 per cent. The price band for the issue is Rs 165 to Rs 185.

The Mumbai-based company Syncom Healthcare Ltd., which expects to mop up to Rs 56.25 crore at the upper end of the price band, was subscribed 72 per cent. The price band is set between Rs 65 to Rs 75 and the issue closes on January 29.

Market players said the small issues suffered from bad timing, given that big state-owned companies are in the market to raise huge funds.

"The market has an appetite only for big companies which that a solid reputation in the market. Also, all primary market investors are preserving their money for mega public sector company issues coming in the next few weeks. It is likely that it may become difficult for smaller companies to sail through," said Deven Choksey, managing director of K R Choksey Shares and Securities.

Some of the major state-owned and private companies that will soon hit primary markets include NTPC, NMDC and Rural Electrification Corporation and Sutlej Jal Vidyut Nigam and real estate firm DB Realty. All these companies are shortly expected to raise around Rs 30,000 crore apart from other qualified institutional placement issues worth Rs 5,000-7,000 crore.