Gujarat takes lion's share of IPOs

AHMEDABAD: It is not for nothing that Gujaratis are known as the badshahs of bourses. An analysis of initial public offerings (IPOs) shows that three Gujarat cities figure in the top ten list in terms of IPO subscriptions.

Ahmedabad comes second after Mumbai. Gujarat would also take pride in the fact that Mumbai tops the chart, owing largely to the Gujarati community settled in the country’s financial capital.

Rajkot and Vadodara rank fifth and seventh in the list. That’s good news for the state, considering that most IPOs in the last one year have yielded handsome dividends to the subscribers. During the period April 2006 to May 2007, around 96 companies hit the capital market and Rs 26170.65 crore were raised.

Of the total applications made in all these IPOs, Ahmedabad had 21.06 per cent share, Rajkot 4.14 per cent and Vadodara 3.04 per cent. In the recently concluded IPO of construction giant DLF, which was the biggest IPO in the country so far, there were more applications from Ahmedabad than even Mumbai, according to a lead manger to the issue who received 32,200 applications from Ahmedabad as against 22,000 from Mumbai.

The flood of IPO applications from Gujarat demonstrates the risk taking capacity of Gujaratis who are always in the quest for higher returns for investment.

Motilal Oswal of Motilal Oswal Financial Services told TOI: “Companies which float IPOs bank heavily on a good response from Gujarat,which is critical to the success of any offering.”

This is not surprising, he adds. “Gujaratis created the stock market in India and, as investors, they have the right pedigree.”

Chinubhai Shah, president, Gujarat Investors and Shareholders’ Association, said: “Gujaratis by instincts are interested in making risk-free profit in the shortest possible period. In a bullish primary market, a majority of them sell their holding on the day of listing itself, taking home a good premium.”