Street signs: IRB InvIT effect on Sterlite InvIT?

Investment bankers say many investors expecting strong listing gains

Tepid response to the listing of IRB InvIT Fund, IRB Infrastructure’s infrastructure investment trust (InvIT), seems to have had a rub-off effect on Sterlite Power's InvIT initial public offering (IPO), which closed on Friday. The issue was subscribed a little over 1.2 times. Investment bankers say many investors, especially high net worth ones, who had put money in the IRB InvIT, expecting strong listing gains, were disappointed with its flat closing. “Investors should understand that InvITs are not the same as IPOs. They are more likely to provide stable and safe yields, rather than sharp spikes," said a banker.
 

Pavan Burugula  

 
Bulls feeling the heat?
 
With the benchmark BSE Sensex hitting 30,000 and continuing a steady run, bulls have been on the rampage for a prolonged period. However, some seem to be changing their views and going slow. “I am unsure about the market, so I intend to stay away for at least a few weeks,” says a leading bull known for his mid-cap pharma picks like Aurobindo Pharma. The worries have deepened after global stock markets started declining due to loss of faith in US President Donald Trump.
 

Joydeep Ghosh

 
Market rally inflates promoter expectations 
 
The last couple of years have seen a number of quality initial public offerings (IPOs) hit the market. A key feature of these issuances was that several of these companies left enough money on the table for investors, resulting in good demand for the offerings and post-listing gains.
 
With the markets making record highs, however, all this could be about to change. Promoters are now eyeing higher valuations for their companies. Investment bankers, on the other hand, are having a hard time ensuring the valuations arrived at are palatable to investors as well. If the trend picks up, investors might well have to settle for lower returns from future offerings compared with what they would have got from IPOs that hit the market in the past two years.

 Ashley Coutinho