War jitters hit IPOs: Powerica, Sai Parenteral lag; Amir Chand bucks trend

Among the three IPOs set to close for subscription today, only Amir Chand Jagdish Kumar has been fully subscribed, while Powerica, and Sai Parenteral's are yet to be fully booked

Weak sentiment in the secondary markets, amid the escalating West Asia conflict, spilled over into the primary markets on Friday, dampening investor appetite for ongoing initial public offerings (IPOs). The public offerings of Amir Chand Jagdish Kumar, Powerica, and Sai Parenteral, which opened for subscription on March 24, together aim to raise ₹1,948.79 crore. 

Among these three mainbaord issues, only Amir Chand Jagdish Kumar IPO has managed to sail through, getting fully subscribed. As per the latest data, the issue was subscribed 2.09 times, largely driven by strong participation from non-institutional investors (NIIs), who oversubscribed their quota by 7.80 times. However, allocations reserved for qualified institutional buyers (QIBs) and retail investors remain undersubscribed. 

 

In contrast, demand for Powerica, and Sai Parenteral's remains muted. As of 12:25 PM on Friday, March 27, the Powerica IPO was subscribed just 5 per cent, while Sai Parenteral’s issue stood at 50 per cent subscription, according to NSE data. 

The subdued IPO response comes amid a sharp correction in the secondary market. Benchmark indices BSE Sensex and NSE Nifty 50 were trading lower by nearly 1.5 per cent each. At last check, the Sensex was down 1,172 points, or 1.56 per cent, at 74,101, while the Nifty was lower by 344 points, or 1.48 per cent, at 22,962.  READ | Sensex crashes 1,100pts, Nifty below 23k; investors lose ₹6trn; key reasons

Brokerage views remain mixed

Brokerages remain divided on the investment merits of these offerings. For Amir Chand Jagdish Kumar, SBI Securities has recommended a ‘Subscribe’ rating at the cut-off price for long-term investors, citing growth prospects. Swastika Investmart, however, has advised an ‘Avoid’ stance, pointing to valuation concerns and an unfavourable risk-reward balance despite acknowledging business momentum. READ MORE 

  A similar divergence is visible for Powerica. While SBI Securities has suggested subscribing for the long term, Swastika Investmart has recommended the issue only for risk-tolerant investors with a long-term horizon, advising limited exposure. READ MORE 

  Sai Parenteral's has also drawn mixed recommendations. SBI Securities and Ashika Institutional Equities have advised subscribing for the long term, whereas Swastika Investmart maintains an ‘Avoid’ rating. READ MORE

Grey market signals subdued sentiment

Grey market trends, meanwhile, mirror the cautious sentiment. The unlisted shares of Amir Chand Jagdish Kumar were trading at a premium of around 3.30 per cent over the upper price band of ₹212, quoted at ₹219 in the unofficial market, according to sources tracking grey market activity. 

Sai Parenteral’s shares were trading flat at ₹392, in line with the upper end of its price band. 

Meanwhile, Powerica’s shares commanded only a marginal premium of about 0.25 per cent over its issue price of ₹395, quoted at ₹396 in the grey market. 

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(Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.)