Debut debacle still stalks bourses

Listing day blues continued with two of the three initial public offers that were listed today closing over 20 per cent below their offer prices.

Deep Industries closed at Rs 27.90, down 23 per cent from its issue price of Rs 36, and KEW Industries closed at Rs 23.60, down 21 per cent from its offer price of Rs 30.

Atlanta, the third IPO subscribed over nine times, fared better, with the stock touching an intra-day high of Rs 209.70 before closing at Rs 192.30, up 28 per cent from its offer price of Rs 150.

The trading volume was brisk with shares worth Rs 475 crore changing hands on the Bombay Stock Exchange and the National Stock Exchange. In contrast, shares of Deep Industries witnessed Rs 31 crore of trading and KEW Industries Rs 19 crore.

Deep Industries opened at a 36 per cent premium to its issue price of Rs 49 (also the day's high) but dipped to Rs 27 before closing at Rs 27.90. KEW Industries opened at a 19 per cent premium to its issue price, hit an intra-day high of Rs 36 and touched a low of Rs 23.10 on the Bombay Stock Exchange.

As many as six of the 10 IPOs in the first half of the current financial year have closed at discounts to their issue prices on their debut.

Atlanta, Tech Mahindra, Voltamp Transformers and GMR Infrastructures are the four stocks that were listed at premiums and ended the first day on the bourses at prices higher than their issue prices. Tech Mahindra, the Mahindra group technology company, closed at Rs 552.80, a premium of 51 per cent over its issue price of Rs 365, on its debut.

Similarly, Voltamp made its debut at a 21 per cent premium at Rs 417.05 (Rs 345) on the BSE. GMR Infrastructure managed to float with a marginal premium on its listing day to close at Rs 210.30 against its issue price of Rs 210.

Six companies that were listed at discounts have collectively eroded 25 per cent of investors' wealth on the day of listing.

The six raised Rs 898 crore (Rs 8.98 billion) through the IPOs but their shares were valued at Rs 670 crore (Rs 6.70 billion) on listing. Deccan Aviation and Unity Infraprojects listed at over 30 per cent discounts to their offer prices while the Prime Focus stock witnessed a 22 per cent discount to its issue price.