Small investors continue to shun PNC Infratech IPO, retail category subscribed only 0.06X on day 2


Retail investors are staying away from the IPO of Agra-based PNC Infratech which plans to raise as much as INR488 crore through its IPO, priced in the range of INR355 to INR378 per share. Till second day of bidding, the IPO received only 2.56 lakh bids in the retail category against the 45 lakh shares reserved for the category. This translates into a subscription of only 0.06 times. People investing less than INR2 lakh in an IPO are categorized as retail investors.

Response in other categories is also not encouraging. According to the combined data from NSE and BSE, total subscription for the IPO stood at 12.68 lakh shares at the end of second day, against 90.6 lakh shares on offer. Subscription in the QIB category was 0.21 times while NIIs (also known as high networth individuals) have bid for 0.23 times. In addition, the company has reserved 5 lakh shares to be allotted to eligible employees.

PNC Infratech Limited IPO bidding (as on 11 May 2015)

Sr.No. Category No.of shares offered No. of shares bid for No. of times of total
1 Qualified Institutional Buyers (QIBs) 2574342 529095 0.21
2 Non Institutional Investors 1930757 435505 0.23
3 Retail Individual Investors (RIIs) 4505098 256725 0.06
4 Employees 50000 47355 0.95
Total 9060197 1268680 0.14

Source: NSE

Thankfully, the company had allotted 38.6 lakh shares to anchor investors at INR378 per share last week, aggregating to approximately around INR146 crore. Goldman Sachs India, HDFC Trustee Company, Birla Sun Life Trustee Company, DSP Blackrock India, Reliance Capital Trustee Company, Reliance Mutual Fund, L&T Mutual Fund, Sundaram Mutual Fund and Kotak Mutual Fund are among the anchor investors.

This is not uncommon for buyers to turn up on the last day of the IPO but retail investors’ absence is conspicuous. This makes the last day of bidding interesting which will decide if the IPO sails through or book running lead managers ICICI Securities and IDFC Securities will be needed to do some adjustments. Earlier this year, Ortel Communications’ IPO size had to be reduced following poor response in retail and HNI categories. Shares of Ortel Communications listed 11.6% lower on its listing in March.


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