Most IPOs put up poor debut show

As Indian equity markets come to terms with higher interest rates and rising commodity prices,stocks debuting on the secondary market have put a poor show. 60% of the scrips that debuted in the secondary market since January 2011,are today trading below their offer price.

As many as 6 out of 7 companies which got listed in the secondary market since end of March,are trading below the offer price,by an extent of 6% to 66%. All three scrips that were listed in the secondary market this week closed below their issue price with Servalakshmi Paper and Innoventive Industries declining by sharply,by 35% and 20%,on the day of their listing.

Experts say that lower interest of investors towards the market in general is affecting the IPO listings as higher inflation and recent hike in the interest rate by RBI continue to play spoilsport.

“Just when investors,including FIIs started looking at Indian equity market again,(the IPO market in particular) the pace of inflation and subsequent rate hikes since January have blocked out interest in IPOs,” says Venkatraghavan S,director,IDFC Investment Banking.