Tepid response to public offers continues

Initial public offerings by Emaar MGF Land and Wockhardt Hospitals were yet to be fully sold on Tuesday, forcing the second company to extend the deadline for submission of bids by two more days.

Emaar MGF, controlled by the biggest Middle Eastern developer Emaar Properties PJSC, got bids for 39 per cent of the 102.6 million shares on offer, while Wockhardt’s bids totalled less than 1 percent of the 25 million shares on offer, the National Stock Exchange said on its Web site. The two companies had cut the size of their initial offerings last month.

The Indian developer may raise 8.7 percent less than planned, while Wockhardt Hospitals lowered its target by 16 per cent, in the worst start to the year for Indian stocks in at least three decades. Wockhardt’s initial offer will end on February 7 and bids for Emaar MGF close tomorrow.

The demand is in contrast with Reliance Power Ltd.’s record IPO last month, which was sold out soon after it opened for subscriptions.

Among other share sales, IRB Infrastructure Developers received bids for four times the offer, and Tulsi Extrusions Ltd. 1.7 times. Both the offers ended on Tuesday.

The volatility in the stock market has also affected the grey market premium of Reliance Power shares. Ahead of its February 11 listing, the grey market premium of RPL has slipped to Rs 175 from around Rs 450 a day before the initial public offer opened on January 15. This indicates that listing price expectations have been toned down from Rs 900 a share to around Rs 625.

Some of the other IPOs, including Shriram EPC, KNR Constructions, J Kumar Infraprojects and Wockhardt are trading at a discount to their issue prices in the grey market.

The premiums for Emaar MGF, Globus Spirit, IRB Infrastructure Developers, Cords Cable Industries and OnMobile Global Ltd have declined by 80 per cent.

Meanwhile, Wockhardt Hospitals on Tuesday decided to extend its IPO closing by two days to February 7 after the issue got subscribed by 0.1 times as at 6 pm.