In a rare instance for a high-profile initial public offer (IPO), the Wockhardt Hospitals? public offer failed to garner the 90% minimum subscription even after extending the issue closing date. This is the first instance of an IPO collapsing in the recent past.
The company will now return the subscription money to investors. The Wockhardt Hospitals IPO could only garner 20% subscription (49.03 lakh shares) against the offer of 2.50 crore shares.
The company has been facing rough weather since the issue opened on February 1, as the markets turned volatile in the wake of the financial turmoil in the global markets. Sensing trouble, the company had reduced the issue size by cutting the price band from the earlier Rs 280-310 to a much lower Rs 225-260, but even that failed to attract investors. The collapse of the issue has set an already scared primary market in jitters, since Wockhardt is a well-known brand from a reputed business house and was expected to garner the required funds for the offer to succeed.
Significantly, while most other IPOs typically struggle to get retail investors interested, in Wockhardt?s case, it was the retail category that gave it the maximum number of subscriptions. All other categories were worse. According to available National Stock Exchange (NSE) data at the time of going to press, against a reserved size of 73.76 lakh shares, the retail category received bids worth 22.99 lakh shares (31% of the category). The qualified institutional buyers (QIB) category saw very poor response. Against a reserved size of 1.47 crore shares, it received bids for only 9.49 lakh (6%). The high net worth individual (HNI) category was the worst, with only 0.06% bids coming in. The reserved size was 24.58 lakh shares, and the bids received were only 14,940 shares.