Record subscription: What went right for Persistent IPO?

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » RELATED NEWS Persistent IPO clocks highest bid in 26 mths at 93.6 times Persistent Systems: Experts give industry & stock outlook

The public issue of Persistent Systems received record subscription in 26 months. It got overwhelming response from investors, especially qualified institutional investors (QIBs). Overall, the issue was oversubscribed 93.6 times, as per data available on the NSE website.

In an interview with CNBC-TV18, Vinay Menon, ED, Equity Capital & Derivative Markets, JPMorgan India, talks about Persistent Systems' issue and the upcoming initial public offerings (IPO).

Here is a verbatim transcript of the exclusive interview with Vinay Menon on CNBC-TV18. Also watch the accompanying video.

Q: How do you explain this phenomenon, a superb subscription for Persistent Systems and a very good government company just barely managed to scrap through, had to be bailed out, why this huge difference? Is pricing the only reason?

A: If you look at the two transactions that have happened over the last couple of weeks, these are two different stories, so it may not be correct to entirely compare the two.

I think what has gone right for Persistent is the following. First and foremost niche play, a focused product-development company, and not too many opportunities to own such a company. Second and more importantly, this is growth capital at work. If you look at capital raising last year de-leveraging was the theme, but here you are seeing growth capital back as a flavour with the investor community.

I will not deny that pricing also helped us in witnessing such phenomenal over subscription levels.