India's ICICI Securities makes tepid debut after $541 mln IPO (updated)

Mishra Dhatu Nigam

04/04/2018 08:44

* ICICI Securities shares fall as much as 16.3 percent on
listing
    * State-run Mishra Dhatu Nigam about a percent down from IPO
price
    * India's IPO market has cooled after record fundraising in
2017  
 

 (Adds details, background, Mishra Dhatu listing)
    By Swati Bhat and Devidutta Tripathy
    MUMBAI, April 4 (Reuters) - Shares in India's largest equity
broker, ICICI Securities Ltd  ICCI.NS , fell as much as 16.3
percent on their market debut on Wednesday, reflecting weak
sentiment around the firm's initial public offering (IPO) last
week that raised a lower-than-target $541 million.
    The stock pared some losses to trade 13 percent down at
456.35 rupees by 0719 GMT, compared with its IPO issue price of
520 rupees.
    Indian state-run special steels and alloys maker Mishra
Dhatu Nigam Ltd  MISR.NS , which also began trading on Wednesday
after its IPO raised the government 4.33 billion rupees ($66.6
million), was 0.7 percent lower at 89.40 rupees. The stock fell
as much as 4.3 percent.
    India's IPO market has cooled after a fall in the main stock
indexes from record-high levels in late January. Eight companies
raised more than $2 billion through IPOs in March but most of
their stocks fell on trading debuts.
    The IPOs of ICICI Securities and state-run military aircraft
maker Hindustan Aeronautics Ltd  HIAE.NS  also failed to attract
full subscription, dampening sentiment toward first-time share
sales after a record $11 billion IPO fundraising last year.
    In ICICI Securities' IPO, India's third-biggest lender ICICI
Bank Ltd  ICBK.NS  - which had initially planned to sell a stake
of around 24 percent - managed to sell 20.8 percent of the unit
that also provides investment banking services.
    Analysts said investors had balked at the IPO's high
valuation, which brokerage Centrum estimated to be priced at
nearly 50 times the firm's 2016/17 earnings and more than 34
times its book value.
    "There were some concerns on valuation and with the market
not doing well overall, we have seen a muted market debut," said
Jagannadham Thunuguntla, a senior vice president at Centrum. He
said he expected the stock to recover with the company's strong
financials and vast digital footprint.
    "At this moment the markets are at a crossroads, and we need
to see how the situation evolves going ahead but there are
several companies looking to raise funds," he said on the
pipeline of IPOs.
 ($1 = 64.9750 Indian rupees)

 (Reporting by Swati Bhat and Devidutta Tripathy)
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