Several companies that got listed in the past few months are trading deep in the red. In all, 15 companies have tapped the capital market in the past three months, of which eight firms are currently trading below the issue price, down anywhere between 1% and 85%.
The worst performers include Taksheel Solutions (down 84%), Tijaria Polypipes (80%), RDB Rasayans (85%) and Brooks Laboratories (78%).
The most recent underperformer is stock broking firm Indo Thai Securities, which fell 69% from its issue price of R74 in debut trade to close at R23.1 on Wednesday on the BSE. The stock hit an intra-day high of R98.9 and a low of R18.8 on Wednesday.
It closed at R22.1 on Friday. It is a retail player based out of Indore, with 14 branches across India. Its initial public offering (IPO) was subscribed 1.18 times and was assigned IPO Grade 2 by CARE.
The companies that have bucked the trend and are trading well above their issue price include Prakash Constrowell (up 80%), Tree House Education and Accessories (45%), Flexituff International (41%) and Inventure Growth & Securities (37%).
Many of these companies have come to the capital market with an issue size of well below R100 crore. Most of the issues were oversubscribed despite lacklustre participation from institutional investors thanks to a good response from non-institutional investors and retail individual investors.
The BSE Sensex has shed about 15% in the year to date. The choppy market has compelled larger firms to postpone their issues and the government to go slow on their divestment programme.
Indian companies raised R10,497 crore in the first six months of fiscal 2012 by way of IPOs, follow-on public offerings and qualified institutional placements compared with R28,592 crore raised in the same period last year, according to data compiled by Prime Database.