GreenSignal Bio Pharma IPO fails to go through

The initial public offering (IPO) of Chennai-based pharmaceutical company GreenSignal Bio Pharma failed to go through on the final day of the offering as institutional investors stayed away. 

The timeline for IPOs is typically three days. GreenSignal had extended its IPO timeline twice — from November 11 to November 17, and then from November 17 to November 22. Besides extending the timeline for the second time, the company also lowered its pricing on November 17 from Rs 76-80 a share to Rs 68-76 a share, and was hoping to raise Rs 110 crore at the upper end of the price band. 

As of 5 pm on Tuesday, the issue had garnered an overall subscription of 1.02 times, data put up on NSE show. The retail quota got bids for nearly nine times the shares on offer, while the category for rich investors was subscribed 0.13 times.  The category for qualified institutional buyers (QIBs) was subscribed 0.21 times. According to current norms, the issue fails if the category for institutional investors is undersubscribed. GreenSignal Bio had reserved as much as 75 per cent of the issue for QIBs. 

“We have reduced the price, which is a positive. There are two more days left and we expect institutions to come in on Monday and Tuesday,” the company’s managing director, P Murali, had told Business Standard last week. 

Indian Overseas Bank (IOB) is the merchant banker to the issue. GreenSignal is a vaccine manufacturing company with global operations, and develops the BCG vaccine. The last public offering to fail was that of edible oil maker NCML Industries in January 2015. 

The benchmark BSE Sensex has slid about five per cent since November 8, following Donald Trump’s win in the US presidential election and demonetisation of high-value currency notes. During this period, foreign portfolio investors have sold shares worth over $1 billion. 

Investment bankers are on a wait-and-watch mode and feel it would be tough to hit the market with IPOs at this juncture. Approval of seven IPOs worth Rs 2,500 crore might lapse in the next three months if they don't hit the market, data show. IPOs worth about Rs 24,500 crore have hit the market in 2016.