Bharti Infratel, a subsidiary of Bharti Airtel, made a dismal debut on the bourses on Friday with the stock listing at more than a 9% discount to the issue price of Rs.220. The stock opened at R200 and slid further to hit the day’s low of R188.7 on the Bombay Stock Exchange (BSE), more than 14% below its issue price. The stock ended the day at R191.2, a discount of a little more than 13% to its issue price. The BSE Sensex was up nearly 0.6% on Friday.
Interestingly, just last week, capital market regulator Securities and Exchange Board of India (Sebi) chairman UK Sinha had lashed out at the investment banking community, saying its credibility had taken a hit as retail investors had turned wary of public offers. The regulator said the bankers were not acting in the interests of retail investors, pointing out that the bulk of IPOs were trading below issue price. Sinha also said the regulator might put in place a ‘formula’ for pricing issues unless the trend reversed. The regulator has initiated a discussion on whether promoters should compensate investors if the price of an IPO falls more than 20% of the issue price within three months of listing or even the stock underperforms benchmark indices — the BSE 500 or S&P CNX 500 — by 20%.
“The general perception was that the issue was already over-priced, which is why the stock listed below the issue price,” said a merchant banker, who didn’t want to be identified. The issue was also weighed down by a cautious outlook on mobile tower operators,” he said. While institutional investors did buy into the issue, there was no unfulfilled appetite, according to market-watchers.
Akhil Gupta, managing director and vice chairman, Bharti Infratel said it was “too early” to comment on listing price.
Bharti Infratel had allocated 2.8 crore shares to 18 anchor investors at R230 per share raising an amount of R651 crore. The anchor investors included Alliance Bernstein, Battery March, Clough Capital, Columbia Wagner, Morgan Stanley, Route One Capital and Sundaram MF, among others.
The dismal debut comes in the wake of decent listing gains by two other firms earlier this week. CARE Ratings, the second largest rating agency in India, had listed at a 23% premium over its issue price of R750, to close at R922.55 on the National Stock Exchange on Wednesday. Shares of PC Jeweller, on the