Mumbai: Shares in Jaypee Infratech fell as much as 12% on Friday, making them the second listing in as many days to fall on debut in the wake of the euro zone debt woes that have rocked world markets.
The tepid response could dent investor support for new share offerings in Asia’s third-largest economy that is forecast to expand more than 8% this year.
On Thursday, state utility Satluj Jal Vidyut Nigam had ended its market debut below offer price.
Private-sector road builder Jaypee, a unit of construction firm Jaiprakash Associates, had raised $500 million in an initial public offering (IPO) that was 1.2 times covered and priced at the lower end of the Rs102-117 per share range.
At 10:10 am, the shares were trading at Rs92.95, down 9%, after having fallen as low as Rs90 in the opening deals. The main Mumbai stock market was down 1.2%.
The stock was the second most actively traded on the share market, notching a volume of about 8 million shares.
Jaypee is developing a 165-kilometre, six-lane Yamuna Expressway in the Uttar Pradesh at a cost of $2 billion, connecting Noida, near Delhi, with the Agra.
The company plans to develop real estate of about 25 million square metres along the expressway.
Morgan Stanley India, Bank of America-Merrill Lynch, Axis Bank, Enam Securities, IDFC Capital, ICICI Securities, JM Financial, Kotak Mahindra Capital and SBI Capital Markets were managers to the issue.
Indian companies have raised about $11 billion through share sales in the domestic market so far this year, compared with $16 billion in 2009, according to Thomson Reuters data.
Analysts expect the proceeds to rise to as much as $40 billion in 2010.