Investors rejected this first public offering. Understand why
Investors rejected this first public offering. Understand why
Amidst all of the excitement around IPO, there comes some unfortunate news. PKH ventures’ first public offering was cancelled. The reason for this is because the investors did not react well. It only received a subscription rate of 65%, and the rate at which QIB subscribed was relatively low. It was just 11%, although QIB should subscribe at least 90% of the time. This is essential in order for the IPO to be successful. It would appear that investors were not very interested in the core aspects of the firm.
In the industry of building and maintaining infrastructure, we face cutthroat competition from a number of very large businesses. In addition to this, the initiatives require a protracted time of gestation. The firm was engaged in a few projects in which it did not have a great deal of experience. Therefore, all of it gave rise to concerns. While this was going on, the corporation was also in the hotel market, which requires a significant amount of brand value. Therefore, it would appear that QIB did not have faith in the ability of the company to become a dominating player in the markets in which it operates. It’s possible that this contributed to a lacklustre response.
At the same time, another initial public offering (IPO) is now active on the market, and its name is Senco Gold. It appears to be doing well given that it has already reached its capacity of subscribers. At the time that I was writing the tale, it has received 2.58 different subscriptions. The company hopes to raise 405 billion rupees through an initial public offering.
The GMP for the stock is Rs 113/share. Therefore, it appears that the firm may be listed at a premium. Senco Gold is a corporation that possesses core strengths in the eastern area. Now that customers will migrate their business from the unorganised gold industry to the organised gold sector, it stands to benefit a great deal. However, there is a significant trust issue, which has become even more prevalent in light of recent occurrences in the industry; thus, this may cause some problems for the organisation. However, on the whole, it appears that brokers are positive on the firm. It is yet unknown how well it will finish up performing in the market, so we must wait and watch.
