The Hindu Business Line : Recently listed stocks plunge below offer price

For investors who weren’t lucky enough to be allotted shares in recent IPOs (initial public offerings), Tuesday presented a fresh entry point to these stocks at bargain prices.

The wave of selling forced several of these recently listed stocks below or within sniffing distance of their IPO issue price, offering a fresh opportunity to buy into them in the secondary markets.

Stocks that plunged below their issue prices during the day included fancied stocks –

some of which witnessed runaway response during their IPO and some that listed at a huge premium.

Edelweiss Capital, BGR Energy Systems and Transformers & Rectifiers were a few stocks that were available at or close to their offer prices during the day’s trading.

The stock of the listed investment bank Edelweiss, for instance, plunged all the way to an intra-day low of Rs 601, a good 27 per cent below its issue price (Rs.825), before it regained ground.

Omaxe, eClerx Services, Kolte-Patil Developers and BGR Energy, all much fancied during their IPOs, also provided similar entry points, either below their issue price or very close to it.

Seventeen of the 50 stocks that have listed on the bourses since July 2007, are now trading at a discount to their issue price.

However, one trend that is apparent in the recently listed stocks is that stocks that fared poorly on listing have been worst hit by the meltdown. IVR Prime Urban Developers, Alpa Laboratories and Empee Distilleries are examples of such stocks.

Among the stocks that listed at a premium after the IPO, Omaxe, Kaushalya Infrastructure Development Corporation and Brigade Enterprises were at a discount of 20 per cent plus, to their offer price, when they closed on Tuesday.

However, market action for the day clearly shows that investors were quick to capitalise on such buying opportunities, as a few of the highly fancied ones have posted a substantial recovery from their day’s low.

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