Investors gave thumbs down to this IPO. Know why

• Follow

Amidst the buzz around IPO there is bad news. IPO of PKH ventures got cancelled. The reason is a poor response by the investors. It got just 65% subscription and the subscription by QIB was very dim. It was just 11%, while QIB should subscribe 90%. This is necessary for IPO to sail through. It seems investors were not quite interested in the fundamentals of the company. It is in the infrastructure business where we have intense competition as well as huge players. Also, a long gestation period is needed for the projects. The company was involved in some projects where it lacked much experience. So all that caused concern. At the same time company was also in the hospitality business and there you need strong brand value. So it seems QIB did not believe in the capability of the company to become a dominant player in its business segments. This might have led to a tepid response.

At the same time another IPO is in the market right now and that is Senco Gold. It seems to be having a better time as it is already fully subscribed. By the time of writing the story it got subscribed 2.58 times. Company is looking to raise Rs 405 crore from IPO. It’s GMP is Rs 113/share. So this indicates that the company might list at premium. Senco Gold is a fundamentally strong company in the east region. Now as consumers will shift from the unorganized to the organized gold sector it will stand to gain a lot. However, there is a huge issue of trust even more after events in the sector so that might create some issues for the company. However overall brokers seem to be bullish on the company. Still it needs to be seen how it will end up performing in the market.