Retail investors give IPOs the cold shoulder

IndiaBulls Power IPO's charged-up performance (the issue was subscribed 21.84 times) earlier this month had only one jarring note: the retail portion of the initial public offer barely scraped through, with a subscription of 1.09 times.

Similarly, the Oil India issue was subscribed 31 times, but saw nominal retail participation of 1.71 times. Some of the other IPOs such as Raj Oil Mills and Globus Spirits never saw the retail portion being fully subscribed. 

Overall, in the last 12 public offers, the average retail participation was 2.39 times -- a sharp decline from 2007, when the average subscription was 14 times.

Since mid-March, the stock markets has seen a huge rebound, with the Bombay Stock Exchange Sensitive Index, or Sensex, which was languishing at 8,000-levels in the first week of March, more than doubling to 16,000 points in the last six months. 

But the story has not been encouraging for the IPOs that were launched in this boom period. The poor retail participation was also reflected in the performance of the listed companies on their market debut. Oil India, for instance, listed at an almost 3 percent discount.

All the others, including Adani Power, Raj Oils Mills, National Hydro Power Company, Globus Spirits, Pipavav Shipyard listed at less than 10 per cent premiums.

This is in stark contrast to 2007, when companies like Edelweiss Capital and Mundra Port listed at a 75 percent premium. Of 103 companies that listed during that year, 62 listed at a premium of over 10 percent.