Wockhardt Hospitals' IPO under-subscribed, closing date extended
Mumbai: The initial public offer (IPO) of Wockhardt Hospital faced the brunt of a volatile equity market as the issue remained under-subscribed on last day of its closing on Tuesday, compelling the company to extend the last date to Feb seven. The issue of 25 million shares was opened Jan 31 for subscription initially in the price band of 280 to 310. Within 48 hours, the price band was sharply reduced to 225 to 260, or almost 30 percent. Analysing the IPO's poor show, financial analyst Deven Malkan said: "The issue itself was highly overpriced." "Moreover, with the sudden fall in the market, it spelt doom for the IPO which would have had promising prospects under normal circumstances," Malkan, editor-in-chief of Fortune India magazine, told IANS. He added that in the present situation, investors are not interested in new issues and this might be the case for other IPOs in the pipeline over the next few days. Wockhardt Hospitals, which is associated with Harvard University, posted a net profit of 155 million ($3.91 million) last fiscal, which was up by only 8 percent compared to its previous financial year. Malkan also added that seeing the recent market boom, many companies priced their issue at unrealistically high levels. But the equally sudden and dramatic turnaround in the equity market has turned the tables for them, he said.