Subscription levels of the IPOs of 2009: SMC Capital

SMC Capital has come out with report on IPOs of 2009 subscription levels.

The key takeaways from the report are:

1. The IPO market in India has tried to stage a comeback during the calendar year 2009 with an amount of about Rs 18,407 Crores through 19 issues.
2. Eventhough the IPO market has appeared to stage a comeback, the interesting trend is that the subscription levels at the time of IPOs are heavily skewed towards QIBs (Qualified Institutional Buyers). While the response from HNIs is moderate, the response from Retail investors is muted. Similarly, no meaningful participation from Employees as well.
3. On overall basis, the average QIB level subscription was 11.42x, the HNI level was 8.49x and the Retail level was 1.86x. The Employee subscription level was a mere 0.56x.
4. Just to the put the things in perspective, in several IPOs, the Retail and HNI portions didn’t even got subscribed fully. For example, the IPOs such as JSW Energy, Godrej Properties, MBL Infrastructure, DEN Networks, Raj Oil Mills couldn’t see the full subscription in their retail portions. Similarly, in case of JSW Energy and Godrej Properties, even the HNI category couldn’t get subscribed fully.
5. This probably underlines the fact that there is no widespread participation in the IPO market revival of 2009. Only the institutions have participated actively, both in QIB portion as well as Anchor Investors. Despite their active participation, several of the IPOs in 2009 had poor listing indicating that institutions had tough time with their performance in IPOs of 2009.