India Inc. has raised around Rs 18,407 crore through 19 initial public offers (IPOs), with majority of the funds flowing in from Qualified Institutional Buyers (QIBs) and not retail investors. Stung by the initial IPOs that left no value for
them, retail investors are moving away from the primary market, said market players.
SMC Capital’s data of subscription levels at the time of IPOs are heavily skewed towards QIBs. On an overall basis, the average QIB level subscription was 11.42 times the issue size, the High Net-worth Individual (HNI) level was 8.49 times and the Retail level was mere 1.86 times. In several IPOs, the Retail and HNI portions didn’t even got subscribed fully.
“This underlines the fact that only institutions have participated actively in IPOs, both in QIB portion as well as anchor investors,” said Jagannadham Thunuguntla, Equity Head, SMC Capitals Limited.
“The concept of anchor investor is clubbed with QIB category and this assures that the offer in that segment is subscribed. This helps the segment to get subscribed,” said Hitesh Agrawal, head of research with Angel Broking.
Biggest drawback of IPOs that listed in last 6 months is that they did not leave anything on the table for investors.
“Large investors would be willing to take risk with such public offers, but not retail investors,” said Agrawal.
“Promoters are becoming greedy, they want to make a killing and disappear. But in doing so they hurt retail investor so much that he does not come to the market again,” said Arun Kejriwal, proprietor of Kejriwal Research and Information Services (KRIS).