Investors turn choosey on IPOs, CARE issue big hit

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Investors in the primary markets seem to be adopting a discretionary attitude towards public issues of equity shares.

On Tuesday, rating agency CARE’s initial public offer in the price band of Rs 700-750 per share was subscribed 40.88 times, as per NSE-BSE combined bidding information available by 7 pm on the closing day of the public issue.

Against an offer size of 61.19 lakh shares, after allotment of more than 10.79 lakh shares to the anchor investors, the issue received bids for over 25.01 crore shares.

Most of the investors turned up on the last of the bidding to put their bids since market regulator Sebi made it mandatory for all investors including the qualified institutional buyers to pay full bidding amount upfront at the time of bidding.

However the public issue of PC Jeweller closing on Wednesday has got a luke warm response being subscribed 0.38 time so far, while Bharti Infratel’s Rs 4,000 crore plus issue has been subscribed 0.15 times on the first day of the opening. However, the issue may get institutional and corporate bidding on the closing day, said analysts.

Primary market expert Prithvi Haldea, MD of Prime Database said, “There is no incentive for applying on the first or second day, most institutional investors now come on the last day, PC Jewellers may not get the same response as CARE but it will also get good response.”

The stock market seems rather bullish on already listed rating firms like Crisil whose shares of Re 1 face value command a market price of Rs 1021.35 while fellow credit rater and listed firm Icra command a price of Rs 1472.4 for Rs 10 face value share. CARE shares too have Rs 10 face value.

A day before opening of the public issue CARE had allotted 10.79 lakh shares worth Rs 80.99 crore at the upper price band of Rs 750 per share to 12 anchor investors.

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