The Shipping Corporation of India (SCI) is entering the capital market on
Shipping Corporation is
SCI's networth, as on
The upper end of the price band of Rs. 140 per share is a mere 2.50% discount to current price of Rs. 143.50. Compare this with Power Grid FPO's 8% discount to then prevailing market price. If market sentiments have changed over the last few days, the government should have factored that in, while pricing this FPO. Moreover, stock price of Power Grid has now corrected to 94 against its issue price of Rs. 90 to non- retail investors, post new shares having come in the market. Thus, Power Grid FPO has not given too much to cheer about, in the immediate future (read listing gains) especially for HNI investors. This will dissuade QIB and HNI investors from showing too much interest in this FPO.
The success of Coal India IPO and Power Grid FPO may have tempted the government to be a little stingy, this time around. Nevertheless, since the issue size (in terms of fund mobilisation) is not too large at Rs. 1,165 crore, it may have got a little aggressive on the pricing front. Maybe, LIC and SBI can always be relied upon in case of lukewarm response to FPO.
The markets would have cheered, had the party continued and if the issue had been priced atleast at a 10% discount (say, upper end at Rs. 130), leaving healthy gains on the table for prospective investors, even if, SCI share price corrects later, post more shares getting added to its free float.
This time around, retail will make an assured gain, given the 5% discount. However, QIBs and HNIs may not make a killing, as seen in Coal
Retail investors may apply at the upper band, and expect to get shares at Rs. 133 a piece, while others can give this one a miss and look at options in the secondary market!