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Journalism of Courage
It’s called initial public offer,but it was promoters who walked away with a lion’s share in this market during 2009,when they sold shares worth about Rs 20,000 crore in their companies to the public shareholders.
Although the amount raised by promoters was also not as big as that in past few years,those who purchased the shares offered in about 20 IPOs this year are sitting on a meager cumulative gain of about Rs 20 crore– measured in terms of change in the value of shares from the time of allotment in IPO to their current market prices.
No surprise that many names were given to IPO as the year passed,the popular ones include ‘Initial Promoter Offer’,’Idiotic Pricing Offer’ and even ‘It’s Probably Overpriced.’
Besides,the small and retail investors mostly kept away from the IPO market amid growing perception that corporates in connivance with merchant bankers are overpricing the offers in their lust for big money.
As a result,shares of nearly half the companies that came out with IPO this year are currently trading below their public offer prices,resulting into losses for those who purchased shares.
The gains are marginal for some and only a few of them — such as little-known Edserv Softsystems and Thinksoft have given good returns to the investors.
