MUMBAI: With the much-awaited debut of Adani Power on the bourses on Thursday proving to be a somewhat dull affair, investors are assessing the
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implications of this lacklustre listing on the forthcoming issues and the broader primary market in general. Adani Power closed almost unchanged over its issue price of Rs 100, after touching a high of Rs 107.90 and a low of Rs 98.50 in a firm market.

Though the Adani public issue was considered pricey, a section of investors still subscribed to the offer on the hope of making some gains on the listing day. They expected the recent appetite for stocks to rub off on public issues too, irrespective of the pricing. But, with Adani’s listless debut signalling that the market is placing due importance to a public issue’s pricing, investors, who had applied for National Hydro Power (NHPC)’s IPO, are now sceptical about how it pans out, especially during listing.

The basis of this concern is that NHPC, which recently completed collecting money through the IPO, was considered expensive by many in the market. But investors, including wealthy individuals, aggressively subscribed to the issue, expecting that there would be demand for quality papers such as NHPC, irrespective of the premium pricing, as the system is flush with funds.

The immediate impact of the sluggish Adani listing was seen on NHPC’s premium in the unofficial grey market, an indicator watched by many to get a sense of the likely listing price. Traders said the premium has shrunk to less than Rs 4-5 per share from Rs 6-7 over the likely issue price of Rs 36 a piece.

Investment bankers said the NHPC issue was aggressively priced at Rs 30-36 per share and an unfavourable listing price could have repercussions on the IPO market, which has just about started showing signs of picking up after the recent lull.

A top official at a domestic investment bank said: “I don’t think we have had a good start to the IPO season…We hope an IPO of the quality of NHPC is not a lost opportunity to revive the primary market.” It is believed that bankers of NHPC had initially recommended a more conservative price band of roughly Rs 24-30 per share, but the government insisted on the current price band.

The aggressive pricing by the government for the stake sale in NHPC is a contrast to the earlier instances like Maruti and ONGC, which were priced to give investors some gains on the table, brokers said.

source: Economictimes

Tags: Adani debut, buy or not NHPC IPO, listing price of nhpc, NHPC IPO, NHPC listing date

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