Mumbai, Feb 10 (UNI) Extended global sell-off pressure along with high-price band, have forced initial public offers (IPOs) to succumb, in the absence of investors buying interest, thereby making it necessary for the new entries to think before moving into the market, according to the marketmen.
In back drop of the prevailing financial turmoil in US, the Indian market has witnessed two major casualties-- withdrawal of Wockhardt Hospital and Emaar MGF IPO within two days, sending a message that the investors are less interested in high-priced offers, Mirae Asset Head equity Gopal Agarwal told UNI.
There is a possibility that some more IPOs, which have recently entered the market at a high-price band or are planning to do so, might face the challenge of survival as the market conditions are highly volatile, Mr Agarwal said, adding ''however, the low-priced offers would be preferable to the investors, which can create benefits as the valuation in the market is high.'' Wockhardt Hospital and realty Emaar MGF withdrew their much-hyped public offers after retail investors gave them a thumbs down and also the SEVC construction was under pressure of low subscription on Friday. The two revised their offer price and also extended the closing date at least twice before taking back from the market.
The offers failed despite ratings because retail investors are wary of the future of the stock market, Director PRIME Database Sanjeev Kandelwal said.
Meanwhile, market analysts observed that the denial of the two large capital generating capacity public offers by the investors has marked a new trend of the retail investors shunning top-rated offerings.
Following the slow-down in the global market, about 28 IPOs, most of them from US and Hong Kong, have withdrawn from markets across the world and are panning to take a back seat, according to the sources.
The analysts are also of the view that UTI Mutual Fund and Oil India, which are supposed enter the markets next week, would replan their price bands at this juncture before entering the market.
IPOs of V-Guard Industries, in the price band of Rs 80-85, and GSS American Infotech, in the price band of Rs 400-450, are also scheduled to be thrown open for subscription next week.
UNI PP/AR SR SM1720