The IPO story is far from over as yet

The IPO story is a mixed bag. Out of the last 10 IPOs that listed recently on the bourses five of them are trading at a discount and the other half at a premium. There's a feeling though that the story may not continue if companies price their offerings aggressively.

 

Interestingly, the five stocks on the positive side are trading at a significant premium to their issue price with Suzlon Energy emerging as the cream of the pack with a 49% premium to its offer price. HT Media, on the other hand, is the biggest loser with the stock down 13% to its offer price. FCS Software too gave a bang for the buck of ordinary investors with a 92% return in two months flat!

 

Company	Offer Price	Mkt Pr (Nov 8)	% Gain/Loss
FCS Software Solutions	50	95.95	91.90
Amar Remedies	28	50.1	78.93
Suzlon Energy	510	762.15	49.44
Sasken Communication Technologies	260	345	32.69
Southern Online Bio Tech Ltd	10	10.84	8.40
aurionPro Solution	90	96.4	7.11
Gujarat Industries Power Co	68	66.95	-1.54
Alps Industries	120	118	-1.67
Talbros Automotive Components	102	96.4	-5.49
Shree Renuka Sugars	285	266.85	-6.37
HT Media	530	458.7	-13.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shree Renuka Sugars and Talbros are the other prominent losers trading at a discount of 6% and 5% respectively.

 

Alpesh Mehta of Keynote Capital begs to differ a bit. Looking at the positive side of the IPO story he comments: "Suzlon Energy, which was offered at Rs 510 to the investing public is now quoting at Rs 762.15, a whopping 49.5% premium! All those who got a share in the IPO pie are laughing all the way to their banks."

 

He feels that the IPO story is not over yet for the discerning investor. His argument is very simple. "Equity markets work on a simple principle: more risks is equal to more profits. Even if investors were to enter mutual funds the probability that they will make a loss always exists. So is the case with IPOs. One needs to be very cautious and needs to understand the company very well before investing in its IPO. Even today, I think that investing in IPOs is a safer bet. The IPO story is not over yet," says he candidly.

 

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