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India’s Junk IPO Market Update – Tara Health Foods Fails to Get Subscribed

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The junk quality of the IPO offerings in the Indian market is making new lows. Despite the markets making new highs most of these low quality issues are barely getting subscribed or even failing to get subscriptions altogether.After getting burned by Reliance Power 2 years ago , Indian investors are becoming more discerning in subscribing to this junk.

  1. NITESH ESTATES- 1.16 times subscribed ( Retail 0.16 times , Non Institutional Investors 0.22 times, “Sophisticated Investors” – 2.54 times) . The numerous I-Bankers would have persuaded their institutional investors friends to help them on this one
  2. TARAPUR TRANSFORMERS – 1.74 times subscribed ( Retail 2.7 times , Non Institutional Investors 5.1 times, “Sophisticated Investors” -0.03 times) . Looks like the sole banker “Comfort” Securities does not have too many institutional friends but a lot of “gullible” retail and non-institutional investors on their roll
  3. TARA HEALTH FOODS -” * Attn Members: Book Running Lead Manager to the issue has informed the Exchange that the Book Building issue of TARA HEALTH FOODS LIMITED will close on May 05th,2010 instead of the earlier closing day on Apr 30th,2010.Further price band has been revised from Rs 180/- to Rs 190/- per share to Rs 175/- to Rs 185/- per share.” – The less said the better on this one. “Sophisticated investors” of this issue – a) IDFC Premier Equity b) Kotak Mahindra Sandstone Capital Master Fund.
  4. JAYPEE INFRATECH – Issue has not closed but most of the bids are in the lower end of their band. This issue might not be as low quality as the others but my opinion of investing in Indian real estate has been written earlier
  5. SJVNL  – This seems by far the much better  issue . Its subscription has also come mainly at the lower end. The government has tried to leave something on the table here compared to their last overpriced issues. I think this issue should not tank post issue like NHPC did,but don’t expect it to be a multibagger like NTPC

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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