It is boom time in the IPO market with companies queuing with their public offers, but it is largely institutional investors who are taking the bait while retail investors and HNIs still appear to be cagey.
While two major IPOs low-cost carrier IndiGo's parent InterGlobe Aviation and fragrance maker SH Kelkar & Company are set to hit the market this week, the last two issues (by Coffee Day Enterprises and Prabhat Dairy) could not get full subscription for the shares reserved for the retail investors.
In case of Coffee Day, even the portions reserved for HNIs, as also their own employees, remain under-subscribed, although both the IPOs managed to sail through on the basis of stronger response among institutional investors, as per the data available with the stock exchanges.
Most of the brokerage firms and investment bankers are advising the investors to subscribe to the upcoming two IPOs, but they remain cautious about the fact that the interest among retail investors was not very strong in recent issues.
Some of them admitted that high price might be keeping individual investors at bay and blamed the promoters and existing private equity investors for this.
InterGlobe will launch its IPO on October 27, through which it aims to raise about Rs3,000 crore, while the public issue of SH Kelkar is schedule to open on October 28 to garner Rs500 crore. The Rs1,150-crore IPO of Coffee Day Enterprises, which runs Cafe Coffee Day (CCD) chain of restaurants, closed on October 16 with final subscription of 1.82 times but demand from retail investors was not as strong. The portion of the float reserved for them was subscribed 90 per cent.