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Samvardhana withdraws IPO; steep pricing takes its toll

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Samvardhana withdraws IPO; steep pricing takes its toll
Samvardhana Motherson Finance Ltd has withdrawn its initial public offering (IPO) due to poor response from investors. Tthe company withdrew its Rs1,665-crore initial pubic offering, on account of poor subscription of just 23.17% of the issue size.

The downtrend seen in equity market and volatility in currency has shaken confidence of investors.

 

"On the advice of the book running lead manager, we have decided to defer our proposed public offer. While we have received a significant interest from potential investor, we believe the continued volatility in the equity and currency markets is not conducive for listing the shares and a good after market performance," a company statement said.

The company has set the price range of Rs Rs 113-118 per share for the IPO, company had earlier said in a filing to the exchange. Standard Chartered and JPMorgan are the bookrunners for the issue.

Earlier this year Goodwill Hospital & Research Centre withdrew its IPO after receiving only 1% subscription. In the past, IPOs have been priced very aggressively by promoters, so as to extract the maximum price from investors. This has invariably resulted in investors losing money when the shares list.

GoodReturns.in

Read more about: ipo samvardhana motherson
Story first published: Monday, May 7, 2012, 11:38 [IST]
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