BS TransComm which found no takers at Rs260, got listed today and ended the day at Rs381!
Strange games are being played at ease in the Initial Public Offering (IPO) market even as the market regulator and the stock exchanges look on. BS TransComm got listed today. It had failed to receive even one-time subscription initially. The price band was reduced and time extended.
Finally the issue barely managed 1.1 times subscription in the extended period. But even as the Sensex tanked on the day of listing, (down 216 points) the stock was almost up 60%!
Isn't it strange that when there were no buyers at Rs260 (issue price), suddenly there will emerge a host of buyers at Rs370-Rs380? The stock closed today at Rs381 on the BSE. According to a market observer, "This is a classic case of price rigging, circular trading and structural deals." He added, "The real fun starts from tomorrow, when the operators start offloading."
The source points out that the same pattern was seen in Bedmutha, Aster Silicate, Sea TV and Tirupati Inks. "All these companies had a similar debut and now there are no takers at lower levels and absolutely no volumes."
Today, two other companies got listed, both at a significant premium, braving the falling market. Prestige Estates, the Bangalore-based builder, had issued shares at Rs183 and ended the day at Rs192.55, up 5.2% even though it was barely oversubscribed by 2.26 times. Gyscoal Alloys, which issued shares at Rs71, ended at Rs81.55, up 15.86%. Gyscoal and BS TransComm both got a grading of 2/5 while Prestige got a grading of 3/5.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
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Avon Corporation which is trading at PE of only 1.33 times. The company has shown good results for June and Sept quarters. Co. paid dividend of 30 paise per share in Oct.2010. The 6 month EPS is Rs.2.11 and annualised could be more than Rs.4.00 . CMP is Rs.5.35. Daily there is bulk trade with almost equal amount of shares in bulk buy and bulk sell.
Considering this, the government should legalise all forms of gambling right from the lowly Matka to the sophisticated betting in cricket; and by extension all types of corruption, match fixing etc.
This will at least make the government and the people of this country look honest and upright.
Bedmutha which saw a volume of 10cr shares on the listing day, is down to 10000 shares a day. The scrip has hit the lower circuit for the fifth consecutive day. SEBI should also look into the market intermediaries associated with the issue.