Financial Daily from THE HINDU group of publications
Friday, Dec 31, 2004
Financial Daily from THE HINDU group of publications Friday, Dec 31, 2004 |
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Markets
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Stock Markets Logistics - Shipping Bharati Shipyard closes at 94% premium to IPO price — Volumes too soar on Day 1 Our Bureau
Mumbai , Dec. 30 SHARES of Bharati Shipyard made a strong debut on the stock market by listing almost 100 per cent premium to the issue price. Bharati Shipyard's initial public offering had received overwhelming response from equity investors. The IPO was oversubscribed 78 times overall while the high networth individuals or non-QIBs category was oversubscribed 120 times. An interesting aspect about today's trading was that the company's entire equity was traded, indicating robust market players' interest in the stock. The stock opened at Rs 121.05 on the NSE, touched a high of Rs 132 and a low of 108.80 before closing at Rs 127.95. Based on the closing price, the IPO provided returns of 94 per cent over the issue the price of Rs 66. Other than the good returns, the number of shares traded in the counter was also high. On the NSE 1.66 crore shares were traded and on the BSE, 93.33 lakh shares. The combined volumes (BSE and NSE) traded were 2.59 crore shares. It was even higher than the company's outstanding equity of 2.25 crore shares after the public issue. The IPO was for 1.25 crore shares of Rs 10 each. But the delivery ratio was very low. On the NSE, only 19.85 per cent or 33.01 lakh shares were presented for delivery and on the BSE, 18.57 per cent or 17.33 lakh shares were for delivery. Brokers said the huge volume on the first day of listing is normal, but they said trading of shares more than company's equity was surprising. According to them, the high volume was due to the several day traders doing the trades. "Since the issue was heavily oversubscribed, indicating a good demand for the shares, day traders were taking advantage of the increased volumes", said a broker. Day traders prefer to trade in securities that are highly liquid.
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