Power Mech Projects made a shaky debut in the stock markets, with shares losing nearly 9% on listing, as China’s efforts to shore up its economy failed to halt a sell-off in global equities.
Amid volatile markets, shares of Power Mech Projects opened more than 6% lower at a price of R600 per share – against the issue price of Rs 640 per share. Although the shares recovered briefly and touched the daily high of R663.1, the recovery was short-lived.
The shares closed at Rs 585.75 on the BSE – down by 8.48% during the session amid high volumes. More than 51.24 lakh shares traded on the BSE and NSE.
Merchant bankers and primary market observers said that grey market premiums saw a sharp fall on Tuesday and was reflective of the weakness in secondary markets. Power Mech Projects shares declined more than 60% ahead of its listing on Wednesday. The shares of Hyderabad-based power infrastructure company were quoting at a premium of Rs 50-55 per share against Rs 150 levels late last week. The company had set a price band of Rs 615-640 for its IPO.
The Hyderabad-based power infrastructure company had tapped the primary markets during the last month to raise Rs 273.2 crore. The issue received good response from the investors as it was subscribed 38 times due to the overwhelming subscriptions received from the non-institutional category which was subscribed 133.29 times.
The company attracted good premiums in the grey market. The premium for Power Mech Projects in the grey market – which are pseudo over the counter markets where IPO shares are bought and sold before officially listing on a stock exchange – was around 23% of the issue price.
The company had raised R81.96 crore from anchor investors in a pre-IPO placement. The list of anchor investors included DSP Blackrock India Tiger Fund and Morgan Stanley.
The proceeds of the issue would be utilised towards expansion of the company’s presence globally and to meet working capital requirements, the company said.