The Hindu Business Line : Signs of revival in primary market

Mumbai, Feb. 19 After the recent debacle, the IPO market appears to be edging towards a revival, if the subscription numbers to some of the current issues are anything to go by.

The public issue of Rural Electrification Corporation (REC) which opened on Tuesday was fully subscribed within the first 27 minutes.

The issue of Kerala-based V-Guard Industries was subscribed 1.11 times on the second day today. Another IPO – GSS America Infotech which closed on Friday last – was subscribed 1.07 times.

According to analysts, these issues have managed to sail through due to their reasonable pricing as compared to those that bombed recently.

“The current IPOs are priced somewhat on par with their listed peers, while the ones that were cancelled were rather aggressively priced”, said Ms Shahina Mukadam, Head of Research, IDBI Capital Markets.

‘More cautious’

Brokers say that though the current issues have received a good response, it would be premature to say that investor faith has been completely restored. . “ Investors have definitely become more cautious. Retail investors still remain on the sidelines. Investors in general will be comfortable only with IPOs whose valuations are perceived as attractive,” said Mr Nitin A. Khandkar, Senior Vice-President - Research, Keynote Capitals Ltd.

The retail participation in the current issues has been subdued. As per the figures on the NSE, V-Guard has been subscribed only 0.38 times by retail investors and REC 0.07 times.