Have you burnt your fingers in these stocks?

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Have you burnt your fingers in these stocks?

Around 70 companies have got listed on the BSE since January. Amongst the 70 companies, as many as 33 companies are trading at a discount to their offer price.

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Year 2006 has been a blessed year for the stock markets, with the four important psychological levels of 10000,11000,12000 and 13000 having been breached. Around 70 companies have got listed on the BSE since January. Amongst the 70 companies, as many as 33 companies are trading at a discount to their offer price.

When the Sensex is celebrating the achievement of these magical figures and is rewarding its investors, it also has investors whose fingers got burnt as they got themselves invested in the list of companies which did not celebrate with the Sensex.

For example, companies like Sakuma Exports which had an offer price of Rs 50 is now trading at Rs 19.95.  Dynemic Products is another company with a 50% loss in its stock price as compared to its offer price. Emkay Shares & Stocks is 32% away from its offer price of Rs 120.

The other companies to make it to this list are Shivalik Global , Uttam Sugar Mills , Visa Steel , Raj Rayon , Nitin Spinners , Deccan Aviation , Jagran Prakashan , GVK Power& Infrastructure etc.

According to experts, aggressive pricing is the key factor for the primary markets not doing as well as the secondary markets. They also feel that the non-participation of midcap stocks has played a role in the weakening of the primary market sentiment as most of the IPOs are midcaps.

But they are also of the opinion that with new issues coming into the picture, the present scenario of primary markets underperforming the secondary markets would change

With lot of big issues, like Parsvnath Developers, Lanco Infratech which are open now and DLF and Cairns Energy that will hit the market in few months, will primary markets again get a breather. Prithvi Haldea MD of Prime Database told CNBC-TV18," The fate of the primary market is closely linked to the state of the secondary market. So it is important to take a call on how much will mature at what point of time.

Since the secondary market have remained stable for at least a month or more than a month, we have seen re-emergence of some of the larger IPOs. We have already had three big IPOs in this month and the fourth one is going to open the next week."  

The lack of too many big ticket issues can also be the reason for the primary market losing its strength. Most of the big ticket issues like Reliance Petroleum Ltd, Sun TV , Punj Lloyd , Mahindra & Mahindra Financial , Gujarat State Petronet Ltd, Jagran Prakashan , Deccan Aviation entered the market when the markets were moving towards the May high. And issues like Global Vectra Helicorp Ltd, Hanung Toys & Textiles Ltd , Accel Frontline Ltd , Gayatri Projects Ltd and Gwalior Chemical Industries Ltd were all small in size.

Maybe the coming of Parsvnath Developers, Cairns Energy, Lanco Infratech will give the primary markets the much needed boost.