The Hindu Business Line : Wockhardt Hospitals IPO date extended

The Initial Public Offering (IPO) of Wockhardt Hospitals, which was to close for subscription on Tuesday, has been extended by two days. According to figures available on stock exchanges, the issue has been subscribed only by 10 per cent.

An official with the lead mangers to the issue said that the issue could not get the expected response from investors. The issue will remain open for two more days, till February 7.

Lukewarm Response

“Since we missed Day one, as the regulatory approval on the revised price band came in late, we decided to compensate for the time lost by extending it for another two days. We applied to SEBI and got their approval for the extension,” a spokesperson for Wockhardt Hospitals told Business Line.

The company had earlier lowered the price band to Rs 225-260 from Rs 280-310 per share, due to weak sentiment prevailing in the stock markets.

Another IPO which also received lukewarm response was Emaar-MGF Land Ltd. The Emaar-MGF IPO, which closes tomorrow, is subscribed only by 40 per cent, as per the latest data available on the NSE Web site. The company had revised their price band to Rs 540-630.

Capital intensive

Marketmen say that the IPOs of both Emaar and Wockhardt have received lukewarm response because of their higher valuations compared with their listed peers. “The IPOs have been aggressively priced and investors have to wait for a long time to get any sort of returns from these companies. Though the opportunities in these businesses are huge, it will take more than two to three years for these companies to give returns, as the business is highly capital intensive,” said Ms Shahina Mukadam, who heads the research at IDBI Capital Markets. These scrips are not retail stocks as they will not give immediate returns to the retail investors, She added. This is also evident from the response these issues received fromthe retail investors. While the Emaar MGF issue was subscribed a total of 0.05 times by the retail investors, it was subscribed 0.65 times by the Qualified Institutional Buyers and 0.04 times by the Non-Institutional Investors.

However, IPOs of IRB Infrastructure Developers Ltd and Tulsi Extrusions Ltd received good response; the issues were subscribed 4.29 times and 2.08 times respectively on Tuesday, the last day of subscription.

Tulsi Extrusions Ltd, a PVC pipes and fittings manufacturer, received a total of 1.18 crore bids across the price band, as per latest data available on the NSE. The Qualified Institutional Buyers portion was subscribed by 1.11 times, the Non-Institutional Investors portion was subscribed by 1.06 times and the retail investors portion was subscribed a total of 0.13 times.

The price band for the issue was set between Rs 80 and Rs 85. The company plans to use the proceeds from the issue to expand its manufacturing facilities at Jalgaon.

The IPO of IRB Infrastructure Developers Ltd, a company involved in infrastructure development and construction, received a total of 21.94 crore bids across the price band. The offer price of the issue was fixed between Rs 185 and Rs 220. The Qualified Institutional Buyers portion for the IPO was subscribed by 1.37 times, the Non-Institutional Investors portion was subscribed by 0.42 times and the retail investors portion was subscribed by 0.05 times. The company will invest the proceeds from the issue in its subsidiary IDAA and to re-pay its existing loans.

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