Another market debutant disappoints; Anupam Rasayan slips below issue price

The spate of poor listings hurt may companies waiting in the wings to launch their IPOs.
Some new listings are losing their luster after grabbing headlines. Shares of Anupam Rasayan India, a specialty chemicals firm, on Wednesday listed at a discount to its issue price. This despite its Rs 760-crore IPO witnessing 44 times more demand than the shares on offer.

Last week, shares of Easy Trip Planners too delivered muted gains even as its IPO saw 160 times subscription. On Wednesday, the shares of online ticket booking firm were available below their IPO price. Furthermore, several companies that have got listed over the past six months have seen their stock prices come off an average 20 per cent from their peak.

The spate of poor listings hurt may companies waiting in the wings to launch their IPOs.

Market players said high net worth individuals (HNIs) have lost money in back to back listings of Anupam Rasayan and Easy Trip.

The HNI portion of the Anupam Rasayan was subscribed 97 times. Essentially, wealthy investors placed leveraged bets to apply in the IPO. This pushed up their acquisition cost.

Shares of Anupam Rasayan ended at Rs 518.5, nearly seven per cent below its IPO price of Rs 555. The stock touched a high of Rs 549 and a low of Rs 502 on the NSE, where Rs 850 crore worth of shares changed hands.

The high trading turnover suggests many IPO applicants booked losses on Wednesday, said market watchers.

Typically, HNIs and retail investors take cues from the grey market to apply in IPOs. The so-called grey market premium for both Anupam Rasayan and Easy Trip had suggested stellar listing gains.

“Given market volatility, the grey market premiums have fallen substantially. The IPO valuations for Anupam Rasayan were little on a higher side. Given the current market sentiment, the listing has been weak. Also, there are too many IPOs hitting the market at the same time which is resulting in quick rotation of money,” said Hemang Jani, Head Equity Strategy, Broking & Distribution, Motilal Oswal Financial Services.

Another half a dozen companies are to make their trading debut this month. Experts believe the performance of these stocks will be a key factor in shaping demand for issuances in the near future.

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