Friday, May 19, 2006

Slow take-off for Air Deccan IPO

Mumbai: The initial public offering (IPO) of Deccan Aviation managed to receive bids for just 1.44 per cent of the total issue on its opening day today.
The poor response — one of the lowest in the recent past — was a fallout of twin factors: the bloodbath on Dalal Street today and the system of compulsory payment of margin money by the qualified institutional bidders (QIBs) applying for IPOs.
According to the data released by the National Stock Exchange, the combined applications received by both the BSE and NSE stood at 3.55 lakh shares. The aviation company is offering 2.45 crore equity shares through the book-built issue.
Merchant bankers associated with the issue were, however, not perturbed by the poor show. “It's only expected that no investor would like to lock in funds in the current volatile market. It makes sense for them to bid towards the closure of the issue,” one of them explained.
Several analysts pointed out the response to the QIB portion today was one of the worst ever seen in the recent past.
19/05/06 Business Standard