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Mumbai, May 4 -- IPOs are doing well, but with a catch. While global and domestic uncertainties linger and the Sensex goes up and down, initial public offerings (IPOs) of shares are resurgent, but the hard numbers show that beneath successful subscriptions levels lie institutional support, while retail participation is languishing. "There has been a lot of nervousness in the market and it has been volatile, leading to weak retail participation. Investors being calculative in their IPO pickings," said Dilip Kadambi, managing director, RBS Investment Banking. For instance, Delhi-based infrastructure player Jaypee Infratech closed on Tuesday with an overall subscription of 1.23 times the issue size but the retail portion was just 12 per cent of the subscription. Similarly, Bangalore-based realtor Nitesh Estates pulled in 1.16 times the issue size retail investors accounted for only 20 per cent of that. Public sector SJVN managed a much better pull attracting 6.6 times the issue size, and in this retail portion accounted for 3.1 times, showing a marked difference. A lot may have to do with the pricing of the issues. Experts say companies may be stretching the valuation in the IPO, leaving less for early listing gains by retail investors. "Indian retail investors apply for listing gains but the investment bankers have been pricing the issues finely, leaving little for the investors (to gain on listing) and this has led to a weak retail response," said Aseem Dhru, CEO, HDFC Securities. The response of the qualified institutional buyers (QIBs) has also been a reason for low retail participation. QIBs are active, but not in an overwhelming way and this is taken as a cue by retail investors, say analysts.
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