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IPO Investment Pattern by Retail Indian Investors – Review and Analysis

November 9, 2006

I decided to explore the investment pattern of Retail Indian Investors in various IPOs in 2006. Based on this pattern, and various other factors, you can predict how retail investors are likely to invest in an IPO.

Below you will find, Name of Company, Retail Investors collection in the IPO, Issue Price / Current Market Price.

Reliance Petroleum Ltd – Rs12,100 crores , Rs 60 / Rs65
Sun TV Ltd – Rs 540 crores, Rs 875 / Rs1270
Tech Mahindra – Rs 1120 crores, Rs 365 / Rs995
Voltamp Transformers Ltd – Rs 327 crores, Rs 345 / Rs 511
Action Construction Equipment – Rs 578 crores, Rs 135 / Rs 251
GVK Ltd – Rs1048 crores, Rs 310 / Rs 248
Unity Infrastructure – Rs 140 crores, Rs 675 / Rs 555
GMR Infrastructure – Rs 144 crores, Rs 210 , Rs351

You can see that Reliance is still the most sought after company and everybody from Grandfathers to kids must have applied in that IPO. SunTV and Tech Mahindra equally good brand names also saw terrific subscription and demand.

Retail investor who has burnt his fingers in GVK and Unity infrastructure issue is unlikely to subscribe in Lanco Infra and may subscribe in Parsvnath.

Info Edge India has sucked Rs360 crores from retail investors already. Based on various other factors I expect the Parsvnath Developers Ltd issue to subscribe 3 times (collection of Rs 1,000 crores) in the Retail category. And in the best case it may subscribe over 5 times (collection of Rs 1,500 crores) in the retail category.

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