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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Basis of Allotment - Expolanka

Basis of Allotment - Expolanka

+7
gamaya
econ
Maximin
Slstock
Chinwi
TuskerLK
tkc
11 posters

Go down  Message [Page 1 of 1]

1Basis of Allotment - Expolanka Empty Basis of Allotment - Expolanka Fri May 27, 2011 10:46 am

tkc

tkc
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

http://www.cse.lk/cmt/upload_cse_announcements/1001306473683_.pdf

2Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Fri May 27, 2011 11:24 am

TuskerLK

TuskerLK
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Oooops..every body getting the big share out of their application...

3Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Fri May 27, 2011 11:27 am

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics

Badu thamai !

4Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Fri May 27, 2011 11:38 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

Chinwi wrote:Badu thamai !

Laughing at your pun.


Hmm so retailers are getting their full quota.. Neutral this is a two sided story. Good and bad

5Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Fri May 27, 2011 3:48 pm

Maximin

Maximin
Equity Analytic
Equity Analytic

slstock wrote:
Chinwi wrote:Badu thamai !

Laughing at your pun.


Hmm so retailers are getting their full quota.. Neutral this is a two sided story. Good and bad

This IPO was over subscribe by only 4 times.
This is quite a small amount of oversubscribe, compare to the earlier IPOs.
Retailers are called the ones who applied shares for 3000 or 1 lak rupees.
So not only retailers, medium playes also gets full allocation
(ones who applied 70,000 with (*12 rupees each) with 840,000 rupees, still gets 100% allocation).
So we can expect a huge selling presure from the first day.
Investers need money back again to apply for the Softlogic IPO before 9th of June.

As many were expected considerabaly small no of investers have applied for this IPO.
There was lot of conversation went whether to buy or not Expo shares as the Private Placement has happend with 6 ruppes each.

6Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Fri May 27, 2011 3:57 pm

econ

econ
Global Moderator

Chinwi wrote:Badu thamai !

atlast retailers gave a lesson to big companies.
I hope from now on big companies do not offer overvalued IPOs to retailers.
lets see what is the valuation of softlogic.
seems to me it is another overvalued IPO.

7Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Fri May 27, 2011 4:02 pm

Maximin

Maximin
Equity Analytic
Equity Analytic

econ wrote:
Chinwi wrote:Badu thamai !

atlast retailers gave a lesson to big companies.
I hope from now on big companies do not offer overvalued IPOs to retailers.
lets see what is the valuation of softlogic.
seems to me it is another overvalued IPO.

Yes,
It has mentioned
"Undersubscibed shares from the Retai and Unit Trust categories were allocated to Employee and Non retail categories" in the announcement.
That means this has undersubscribe by retails.

8Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Fri May 27, 2011 4:37 pm

Maximin

Maximin
Equity Analytic
Equity Analytic

Maximin wrote:
econ wrote:
Chinwi wrote:Badu thamai !

atlast retailers gave a lesson to big companies.
I hope from now on big companies do not offer overvalued IPOs to retailers.
lets see what is the valuation of softlogic.
seems to me it is another overvalued IPO.

Yes,
It has mentioned
"Undersubscibed shares from the Retai and Unit Trust categories were allocated to Employee and Non retail categories" in the announcement.
That means this has undersubscribe by retails.


Hmmmm,
got a 1 Negative reputation for posting above

9Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Fri May 27, 2011 9:30 pm

gamaya


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Hi, Chinwi,

That sums up things nicely. Looking forward to hear from you often.

10Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Fri May 27, 2011 9:37 pm

gamaya


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Guys,

Sadly what I think is its the poor retailers who may learn the lesson.

11Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Fri May 27, 2011 11:37 pm

Chabbi

Chabbi
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Maximin wrote:

Investers need money back again to apply for the Softlogic IPO before 9th of June.


i think now company as learned lesson & other new IPO releases learnt a lesson Smile But unfortunately this lesson didn't teachable for SOFTLOGIC & i think EXPO wont trade Before 9th June... Thn i think expo was only 2.4bn + but SOft is 4+ bn so thy also in that same threat where expo struggle ... PRIVATE PLACEMENT Smile

I was confident with EXPO but i was unable to apply IPO but now im so happy & thnks goes to GOD & SEF forum guys Smile aftr it oversubscribe by only 4%

will see nxt IPO even do correct pricing Smile

12Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Fri May 27, 2011 11:49 pm

Fresher


Moderator
Moderator

Maximin wrote:
This IPO was over subscribe by only 4 times.
This is quite a small amount of oversubscribe, compare to the earlier IPOs.
Retailers are called the ones who applied shares for 3000 or 1 lak rupees.
So not only retailers, medium playes also gets full allocation
(ones who applied 70,000 with (*12 rupees each) with 840,000 rupees, still gets 100% allocation).
So we can expect a huge selling presure from the first day.
Investers need money back again to apply for the Softlogic IPO before 9th of June.

As many were expected considerabaly small no of investers have applied for this IPO.
There was lot of conversation went whether to buy or not Expo shares as the Private Placement has happend with 6 ruppes each.

yea those who optimistically thought would get a refund would not have too.
btw, the issue was for 14/- so 70,000 shares means almost a million rupees.

13Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Sat May 28, 2011 1:16 am

TuskerLK

TuskerLK
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

npp wrote:
Maximin wrote:
This IPO was over subscribe by only 4 times.
This is quite a small amount of oversubscribe, compare to the earlier IPOs.
Retailers are called the ones who applied shares for 3000 or 1 lak rupees.
So not only retailers, medium playes also gets full allocation
(ones who applied 70,000 with (*12 rupees each) with 840,000 rupees, still gets 100% allocation).
So we can expect a huge selling presure from the first day.
Investers need money back again to apply for the Softlogic IPO before 9th of June.

As many were expected considerabaly small no of investers have applied for this IPO.
There was lot of conversation went whether to buy or not Expo shares as the Private Placement has happend with 6 ruppes each.

yea those who optimistically thought would get a refund would not have too.
btw, the issue was for 14/- so 70,000 shares means almost a million rupees.

Mates, CBSL's new regulation on issuing guarantees for IPOs came into force from this IPO,which means one bank can issue a total guarantee value equal to half of the IPO issue, therefore I expects less times over- subscription to the upcoming IPOs also.

I'm not sure whether banks other than commercial banks can issue guarantees for IPO. If the answer is not; then we can easily calculate the maximum times an IPO can be subscribed by guarantees (assuming all the banks issue guarantees to the full value)

14Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Sat May 28, 2011 5:15 am

chamith

chamith
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

tinyman,

But this does not affect Retailer or Small investor, who are given the priority in allocation. Because only big players go for bank guarantees.

15Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Sat May 28, 2011 11:55 am

TuskerLK

TuskerLK
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

chamith wrote:tinyman,

But this does not affect Retailer or Small investor, who are given the priority in allocation. Because only big players go for bank guarantees.

Yes Chamith, what my point is usually IPOs get oversubscribed by applications with guarantees for the large/full IPO value. Moreover any bank can issue guarantees without any limitations on their total exposure. Banks used to issue guarantees with less than 1% cash margin.

Now, these rules are changes and a person can apply for maximum of 50% of the issue and bank's exposure also limited to 50% of the issue. Which means that the use of guarantees in IPOs is far limited than earlier.

Earlier we used to have IPOs with massive over subscription supported by the guarantees.

We retailers used to get at least a reasonable allocation due to the fact that we,even though the number of applications are huge,only constitutes very little to the total over subscription.

So,what my point here is, hereafter we can see less times over subscription to the IPOs above billion rupees.

And what ever the case,we will be getting much more shares allocated, which means we will be rushing to sell of on the initial day. More selling pressure means less appreciation; like what we saw on FLCH.

In conclusion; we can see lesser over subscription to the up coming IPOs and less price appreciation on the market. Earlier I used to look at my % gain to decide what to do, but now I'm looking at the total return from that investment, like if I get 30,000 then I would sell,it doesn't matter how much % gain I'm making.

Open for discussion

16Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Sat May 28, 2011 12:01 pm

Fresher


Moderator
Moderator

earlier due to the large over-subscriptions, retailers used to apply large and expect only a few hundreds.
for expo they have got what they wanted and as you say there will be many looking forward to sell large quantities.
but in future people will realize and will apply only a few hundreds or thousands that they want. ultimately large IPOs may not be over subscribed on the first day and if it does, it will be not by retailers

***another point that I stressed when the new rule was introduced
40% was allocated for retailers
BUT
issue was closed when it was oversubscribed, which does not necessarily mean that the retail category was also over subscribed but the overall issue.
is this fair? what do you think?

17Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Sat May 28, 2011 12:27 pm

tuskerB

tuskerB
Stock Trader

npp wrote:earlier due to the large over-subscriptions, retailers used to apply large and expect only a few hundreds.
for expo they have got what they wanted and as you say there will be many looking forward to sell large quantities.
but in future people will realize and will apply only a few hundreds or thousands that they want. ultimately large IPOs may not be over subscribed on the first day and if it does, it will be not by retailers

***another point that I stressed when the new rule was introduced
40% was allocated for retailers
BUT
issue was closed when it was oversubscribed, which does not necessarily mean that the retail category was also over subscribed but the overall issue.
is this fair? what do you think?

I think retailers are never responsible for massive over-subscription, isn't it npp. I agree with tinyman.

18Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Sat May 28, 2011 12:35 pm

Fresher


Moderator
Moderator

tuskerB wrote:
npp wrote:earlier due to the large over-subscriptions, retailers used to apply large and expect only a few hundreds.
for expo they have got what they wanted and as you say there will be many looking forward to sell large quantities.
but in future people will realize and will apply only a few hundreds or thousands that they want. ultimately large IPOs may not be over subscribed on the first day and if it does, it will be not by retailers

***another point that I stressed when the new rule was introduced
40% was allocated for retailers
BUT
issue was closed when it was oversubscribed, which does not necessarily mean that the retail category was also over subscribed but the overall issue.
is this fair? what do you think?

I think retailers are never responsible for massive over-subscription, isn't it npp. I agree with tinyman.

of course not, that's what I'm saying as well. But collectively that too is quite number but in the future we might see large IPOs not being unsubscribed on the first day itself.

Further the question i ask from fellow members is whether a company should keep the issue open till the 40% of retailer category too is fully subscribed

19Basis of Allotment - Expolanka Empty Re: Basis of Allotment - Expolanka Sat May 28, 2011 12:39 pm

TuskerLK

TuskerLK
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Maximin wrote:
Maximin wrote:
econ wrote:
Chinwi wrote:Badu thamai !

atlast retailers gave a lesson to big companies.
I hope from now on big companies do not offer overvalued IPOs to retailers.
lets see what is the valuation of softlogic.
seems to me it is another overvalued IPO.

Yes,
It has mentioned
"Undersubscibed shares from the Retai and Unit Trust categories were allocated to Employee and Non retail categories" in the announcement.
That means this has undersubscribe by retails.


Hmmmm,
got a 1 Negative reputation for posting above


you have got a neg rep for your first post, that is might be because of several errors in that post, especially the IPO price, it's not 12 but 14



Last edited by tinyman on Sat May 28, 2011 12:39 pm; edited 1 time in total (Reason for editing : typo)

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