Most of the follow-on offers made by banks and manufacturing companies have eroded investor wealth even as the BSE Sensex is scaling new heights every day.
Ten of 17 such offers made in the last one year are now trading at a discount to issue prices. Six out of 17 have given good returns, while one scrip is trading at almost its issue price.
The follow-on offers are public floats made by listed companies. The issues that eroded investor wealth were of four public sector banks and six manufacturing companies in the private sector.
Three banks and three companies in the manufacturing sector are now trading at a premium to their offer prices while Bank of Baroda is trading at its issue price.
Allahabad Bank, Andhra Bank, Oriental Bank and South Indian Bank have been trading at a discount to their follow-on issue prices, while ICICI Bank, Syndicate Bank and Union Bank have been trading at a premium. Bank of Baroda is trading at Rs 230.30 against its issue price of Rs 230.
Era Construction has given the maximum return (309 per cent), followed by Triveni Engineering (162 per cent) and Syndicate Bank (79 per cent).
Among the public sector banks, Andhra Bank is trading at Rs 80.80, down 10 per cent from its offer price of Rs 90. South Indian Bank is trading at Rs 61.65, down 7 per cent from its issue price of Rs 66, and Allahabad Bank is trading at 78.95, down 4 per cent from its offer price of Rs 82.
After the failure of the follow-on issues of the five public sector banks, investors are waiting for those of three State Bank of India associates - State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Discussion Group
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