Tepid listings: Share price of 3 new stocks in last 2 weeks fell up to 14% on listing from IPO price

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Updated: October 10, 2018 4:04 PM

After Garden Reach Shipbuilders’ shares fell by nearly 13% on listing today, at least three recent public issues have been off to a tepid start. We take a closer look.

Notably, while the other two IPOs had seen a tepid response to their public issues, IRCON International IPO was subscribed nearly than 10 times.

After Garden Reach Shipbuilders’ shares fell by nearly 13% on listing today, at least three recent public issues have been off to a tepid start in the last two weeks alone. Notably, shares of state-run Garden Reach Shipbuilders & Engineers plunged to Rs 102.50 on NSE, implying 13% discount to its issue price of Rs 118. On BSE, the stock listed at Rs 104, down by nearly 12% this morning.

On Monday, shares of Housing finance company Aavas Financiers made a weak market debut, even as the shares listed at Rs 758 on BSE, a 7.7% discount to its issue price of Rs 821. The shares were trading at Rs 789, up by more than 2.2% on NSE this afternoon. The weak listing was amid unfavourable market conditions and sharp correction in NBFCs stocks including housing finance companies after IL&FS-led liquidity fear and high valuations.

The IPO too failed to gather interest, even as Aavas Financiers failed to achieve 100% subscription. The public offer was subscribed by just 97% between 25th and 27th September, launched in a week that saw a meltdown in stocks of non-banking finance companies.

Earlier, shares of IRCON International too plunged by 14% as compared to issue immediately after listing. The shares fell to Rs 410.3, down by 13.62% as compared to issue price of Rs 475 on September 27th. Interestingly, during the same time, the IPO of  Garden Reach Shipbuilders was extended to October 1st, after the firm failed to garner enthusiasm, highlighting the weak sentiment for new paper.

Notably, while the other two IPOs had seen a tepid response to their public issues, IRCON International IPO was subscribed nearly than 10 times.  Even after extension, Garden Reach Shipbuilders IPO was subscribed about 1.02 times, receiving bids for 2,97,58,920 shares against the total issue size of 2,92,10,760.

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