Dena Bank Stock Listed, Dips To Rs 27

The Dena Bank issue was listed on Monday and through much of the trading session at the BSE, it was traded below its issue price of Rs 30.

The Dena Bank share opened strong at Rs 39.75, touched a low of Rs 26.75 before closing the day at Rs 27 on the Bombay Stock Exchange (BSE), 10 per cent below its issue price. Dena Bank had raised Rs 180 crore in November through an IPO at 30 rupees a share.

Analysts said Dena Banks share price was likely to fall further, despite a sharp 10 percent jump in Indian share prices on the BSE top 30 index since the start of the year.

 

The issue pricing was very aggressive and even at these levels, it continues to look overpriced, said Prabhod Agarwal, banking analyst at securities firm James Capel B&K.

Indias lumbering state-run banks had planned to raise Rs 20 billion rupees in the current financial year ended March 31, 1997. Dena Bank and Bank of Baroda set the ball rolling with new issues of Rs 1.8 billion rupees and Rs 8.5 billion respectively.

We do not expect BoB to go below its issue price. Its allotment pattern doesnt look as vulnerable with the bulk of the issue attracting longer-term investors, said an analyst at a US broking firm. The Bank of India, picking courage from the recent spurt in share prices said last week its Rs 675 crore issue would hit the market on February 21.