Bharti Infratel scrip falls 14% in first day flop show
Bharti Infratel, a subsidiary of Bharti Airtel, made a dismal debut on the bourses on Friday with the stock listing at more than a 9% discount to the issue price of Rs.220. The stock opened at R200 and slid further to hit the day’s low of R188.7 on the Bombay Stock Exchange (BSE), more than 14% below its issue price. The stock ended the day at R191.2, a discount of a little more than 13% to its issue price. The BSE Sensex was up nearly 0.6% on Friday.
Interestingly, just last week, capital market regulator Securities and Exchange Board of India (Sebi) chairman UK Sinha had lashed out at the investment banking community, saying its credibility had taken a hit as retail investors had turned wary of public offers. The regulator said the bankers were not acting in the interests of retail investors, pointing out that the bulk of IPOs were trading below issue price. Sinha also said the regulator might put in place a ‘formula’ for pricing issues unless the trend reversed. The regulator has initiated a discussion on whether promoters should compensate investors if the price of an IPO falls more than 20% of the issue price within three months of listing or even the stock underperforms benchmark indices — the BSE 500 or S&P CNX 500 — by 20%.
“The general perception was that the issue was already over-priced, which is why the stock listed below the issue price,” said a merchant banker, who didn’t want to be
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