Most IPOs in 2009 trading below issue price


Most IPOs in 2009 trading below issue price
Mumbai: Though, 2009 can be regarded as a year of major initial public offerings (IPOs), most of the companies that have gone public this year are seeing their shares trade lower than their issue price. According to research firm Prime Database, in 2009, there were 21 IPOs that raised 19,535 crore. In 2008, 36 IPOs raised 16,927 crore. In 2007, 105 IPOs mobilized 34,179 crore. The year 2009 saw as many as five issues of over 1,000 crore each, and for the first time the year did not witness any issue below 10 crore, reports Business Line. The average size of the IPOs in 2009 rose to 931 crore from 445 crore in 2008 and 426 crore in 2007. "This year only large- and medium-sized companies came out with their IPOs. Smaller companies stayed away from the primary market," said Prithvi Haldea, Chairman and Managing Director of Prime Database. Investors were cautious and went for IPOs of better known companies as risk appetite remained low, he said. The smallest IPO of the year was Edserv Softsystem's 24 crore issue, while the largest was NHPC's 6,039 crore IPO. Though only a few IPOs this year are trading above their issue prices, the deal sizes remained of a good amount, said merchant bankers. "The deal sizes remained big this year as the all the IPOs of this year received good response. They were all completely subscribed. None of the issues were rejected because of pricing," Haldea added.