Date:13/07/2006 URL: http://www.thehindubusinessline.com/2006/07/13/stories/2006071303591500.htm

Back Shirdi Industries withdraws IPO

Rajesh Abraham

Mumbai , July 12

Shirdi Industries has withdrawn its Rs 43-50 crore initial public offering (IPO) as it failed to garner sufficient investor demand.

This is the third company in recent times to withdraw the IPO due to lukewarm investor interest in the primary market.

The previous two IPOs that withdrew the offer were textiles firm, Vigneshwara Exports Ltd and plastics company Bluplast Industries Ltd.

The IPO of Shirdi Industries, which is a manufacturer and importer of furniture accessories, was subscribed only by 72 per cent even after the extension of deadline for the issue close by three days. "We have decided to withdraw from the IPO. We have decided to raise the required funds for our expansion plans through term loans from banks," said Mr K.P. Joshi, Compliance Officer of Shirdi Industries. The company had offered 65 lakh shares through the IPO.

Shirdi Industries had earlier brought down the price band of the issue from Rs 69-78 to Rs 67-78 in a bid to attract more investors, but the move also turned out to be unsuccessful.

Analysts said the investor sentiment for the IPOs was very low, after all recent IPOs including Deccan Aviation (down about 50 per cent from issue price at Rs 78), Allcargo Global Logistics (down 3 per cent), Prime Focus (down 17 per cent) and Unity Infraprojects (down 38 per cent) were trading much below the issue prices.

Even the shares of the high profile company, Reliance Petroleum, which created a record for the highest ever response from retail investors in its IPO, are not faring very well on the bourses. The shares are now quoting at Rs 63-levels, compared to the issue price of Rs 60 per share.

IPOs weak

With the withdrawal of three IPOs in recent time, analysts expect the primary market to be lukewarm for at least another 2-3 weeks. Merchant bankers said they are keeping their fingers crossed as several big IPOs including property developer DLF and commodity bourse MCX depends on a change in the investor sentiment.