Demonetisation after effect: GreenSignal IPO witnesses red signal from QIBs

Is the present condition of the Indian equity markets forcing the institutional investors to stay away for now in these days of demonetisation after effect--a case in consideration is the IPO of GreenSignal Bio Pharma. Though the pharma major having an established track record and being a key player even in the overseas vaccine markets extended its timeline twice during the month and also lowered its pricing per share, only thing it received from the investors is lukewarm responses. Data on the National Stock Exchange (NSE) reveals that till end of Friday, November 18, the IPO received an overall subscription of merely 1.06 times. GreenSignal had reserved as much as 75 per cent of the IPO for institutional bidders and what has been bothering the company management is the responses from such bidders even after bringing down the price from Rs 76-80 per share to Rs 68-76 per share. According to market data available, over half a dozen IPOs have been lined during next few months while market sources say, over a dozen companies across India were preparing themselves for raising money from the markets taking the IPO route. "All these are now going to adopt a wait and watch policy as none wants to take risk of being undersubscribed in this present condition when markets are witnessing steady fall  since November 9. They may come back to the markets only the condition improves and only God can predict when things are going to improve," says an analyst based in Mumbai. Interestingly, this year Dalal Street witnessed huge number of IPOs hitting the markets and except rare cases of one or two, all of them were highly subscribed and had given good returns to the retail investors. "The momentum is lost for now, the tempo and sentiments among the investors have disappeared since the announcement of demonetisation. It is more of a scare, a panic situation rather than situation caused due to reality," said the analyst requesting anonymity. NSE data also reveals though GreenSignal had reserved as many as 10934670 shares for the QIBs, till end of November 18, not a single has been taken by the QIBs. "This is a scary situation for the companies taking IPO route. We are not blaming demonetisation or Donald Trump for it but the data clearly says that not only retail investors presently shying away from the markets, but even QIBs. While the Operation Black Money is to be appreciated, we can not avoid talking about the issues we are facing at the same time," said a senior manager of a reputed broking house having pan-India operations. While retail investors have been staying away from the markets last 10 days and if one can closely monitor the numbers, it is evident that forget about buying, investors even not coming to the markets to sell their stocks. Wait and watch is the policy for now for people associated with the equity markets in India, at least for next few weeks for sure.