The Hindu Business Line : SVEC Constructions IPO to be withdrawn

The list of the casualties seems to be growing on the IPO front. The lead mangers of Hyderabad based SVEC Constructions Ltd have decided to withdraw the IPO, which was to close on Wednesday. As on 5 p.m. on Tuesday, the issue was subscribed only by 25 per cent. The company had reduced the price band and extended the deadline.

Market sentiments

Last week, two high-profile IPOs – Emaar MGF and Wockhardt – were called off following poor investor response. Analysts said that these IPOs failed due to aggressive pricing and the current market sentiments. Amidst the chaos, some companies are still willing to take a chance to go ahead with its issues. GSS America Infotech Ltd went on with its IPO as planned.

The issue opened on Monday and is expected to close on February 15. The company is offering a total of 34.9-lakh equity shares to the public and the price band is fixed between Rs 400 and Rs 440.

As per the latest data available on the NSE Web site, 7 per cent of the issue was subscribed.

“The last day is when most of the investors will be subscribing to the issue; the first few days do not hold much relevance so as to decide the fate of the issue. GSS America is a unique company and the issue has been reasonably priced,” said Mr Rajeev Mehrotra, Executive Vice-President and Co-Head of Investment Banking, Edelweiss Capital Ltd.

Another company that is braving the choppy markets is Kerala based V-Guard Industries Ltd. The company has set the IPO dates for February 18 with an issue size of 80-lakh equity shares. The price band is fixed between Rs 80 and Rs 85.

Rural Electrification Corporation too will be going ahead with its issue, which will hit the markets on February 19 and will close on February 22. The company plans to raise about Rs 1,600 crore from the issue. The company has fixed the price band between Rs 90 and Rs 105. In the past one month, stock markets have witnessed high volatility with the Sensex falling more than 20 per cent. Some companies are even re-thinking on when to enter capital markets. Globus Spirits, a Delhi-based manufacturer of alcohol, was expected to announce its IPO dates soon.

market conditions

But due to the current market conditions, the company has decided to wait. “We will wait till the markets stabilise and seem more attractive,” said Mr R. Ramnath, Vice-President, Investment Banking, SREI Capital Markets Ltd, the book running lead managers to the issue.

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