Sep 25, 2009

Thinksoft IPO Price band reduced

Thinksoft Global Services has extended its initial public offering (IPO) closing date to October 1, 2009 from the earlier decided date, September 24, due to a lukewarm response from investors, especially qualified institutional investors (QIBs). It also reduced its IPO price band to Rs 115-125 from the earlier Rs 120-130 per share.

Commenting on this development, Asvini Kumar, MD, Thinksoft Global Services, said till yesterday QIBs had not contributed much whereas the high networth individuals (HNI) portion was oversubscribed twice and the retail portion was oversubscribed 1.3 times. 'The pricing and the extension is done on investor bankers? advice and they feel confident,' he added.

If you look at the data as of yesterday, the qualified institutional buyers (QIBs) have not contributed whereas the high networth individuals (HNI) portion has been oversubscribed twice and the retail portion has been oversubscribed 1.3 times. So, this is a very interesting trend. So, the questions here are why is the QIB so low and why are the other things looking good. So, we try to interpret this data and I can tell you that the QIBs do parametric investing, they will have their own set of rules and guidelines for investing. For example if one of the guidelines was size or something like I won?t invest below a certain thing or I will invest in a company with above a certain thing or issue size above a certain thing that could become a constraint but I really don?t know what their parameters were. But if you look at the HNI and retail response, one thing becomes very clear that there is a huge segment of individual retail investors, intelligent HNIs who look at their investing decisions based on the quality of the management, the promoters commitment, the company?s profitability, our topline and bottomline growth, our dividend record for ten years, good cash reserves, so they see a value proposition in this. According forester report, the specialist and niche players are not going to be affected much and it is the Indian outsourcing strength and our skills as a domain focused company we are in good state. So, I think the lesson to be learnt is that there is a new target and we have to give them time to come and invest and close out the issue and we have given them an opportunity, the MD said.



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