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Investors in IPOs have lost over Rs 5,000 cr in 2008 so far

Monday, 15 September , 2008, 15:57

New Delhi: Primary market investors have lost more than Rs 5,000 crore with shares of most of companies, which
came out with initial public issue since January, trading at a discount.

“Out of 34 IPOs issued this calendar year, 26 of them closed below their issue price last week. These IPOs have
raised Rs 16,920 crore but the current value stands at Rs 11,562 crore. So they are suffering a loss of 31.67 per
cent,” said Jagannadham Thunuguntla, Equity Head, NEXGEN Capitals Limited.

He said five companies which include JSW Energy, RNS Infrastructure, Ybrant Technologies, Elysium Pharma and
Kamayani Patients Care, with the proposed issue of more than Rs 4,000 crore, withdrew their IPOs prior to SEBI
approval.

In 2008, 20 companies did not tap the primary market despite approval from SEBI due to uncertainty in the markets.
Shares of eight out of ten companies which got listed on stock markets during second quarter of the current fiscal
(July-September) following the IPO are trading below the issue price.

According to NSE data, the shares of only Vishal Information Technologies and Austral Coke and Projects are at 100
per cent and 30 per cent premium respectively, while the equity of remaining companies are being traded at discount.

The shares of companies (listed during second quarter) which are trading below the issue prices include Resurgere
Mines and Minerals, NuTek India, Birla Cotsyn India, KSK Energy, Lotus Eye Care, First Winner Industries, Archidply
Industries and Sejal Ar chitectural Glass.