Mumbai: Jayesh Jhaveri has had enough of initial public offerings (IPOs) for now.

Like many individual investors, the retired Mumbai businessman has seen his shares in NHPC Ltd’s $1.25 billion (Rs6,000 crore) IPO fall below their offer price. Jhaveri, 69, figures he’s better off buying already listed stocks in a market that has risen 74% this year.

“Why should I put my money in these IPOs, when the prices fall below the issue price on the listing day itself and are still around there?" says Jhaveri. “One would rather buy the active stocks in the secondary market."

Below expectations: A Reliance Power plant. The IPO issue of the firm was covered around 70 times, with the retail portion oversubscribed 13.6 times, but the stock has never traded above its IPO price.

“There will be more sanity and you will see hopefully more sensible pricing taking place," said Atul Mehra, managing director of investment bank JM Financial.

Indian companies have raised roughly $15 billion through share sales this year, surpassing the total for all of 2008, and billions of dollars worth of IPOs are in the pipeline.

Companies readying listings include Reliance Infratel Ltd, JSW Energy Ltd, Indiabulls Real Estate Ltd, Great Eastern Energy Corp. Ltd and Oberoi Constructions.

“The bad listing makes the investor exit the stock to cut losses and pressurises it more," said Rajen Shah, chief investment officer at retail brokerage Angel Broking Ltd.

“One or two such bad experiences scares him away from other IPOs. It’s almost a cycle, until some company leaves enough room for listing gains while pricing it," Shah added.

State-run power company NHPC saw its much-anticipated IPO subscribed by more than 23 times, but the portion set aside for individual investors was covered less than 4 times.

NHPC shares gained more than 10% in their 1 September trading debut, but have mostly traded below their offer price.

Adani Power Ltd’s $630 million IPO was subscribed around 18 times, with the retail portion subscribed nearly 3 times. Its shares gained almost 8% on their first trading day, but are currently around their IPO price.

With that recent experience in mind, many individual investors shunned Oil India Ltd’s (OIL) $570 million offering, which was subscribed more than 30 times, but just 1.8 times in the retail portion. The stock debuts on Wednesday.

Adani, NHPC and OIL all priced their offerings at the top of their indicated ranges.

“Companies have not really left anything on the table for the investors," said Ambareesh Baliga, vice-president of Karvy Stock Broking Ltd.

Some investors are still smarting from last year’s much-hyped $3 billion Reliance Power Ltd IPO. The issue was covered around 70 times, with the retail portion oversubscribed 13.6 times, but the stock has never traded above its IPO price.

“Most of the companies planning IPOs are becoming slightly more conservative in their pricing after the after-market performance of a couple of recent IPOs," said Rashesh Shah, CEO of investment bank Edelweiss Capital Ltd.

He said retail appetite for new listings will remain given high levels of savings, but said heavy oversubscription levels and big first-day trading pops of the sort seen during boom times were unlikely—a development he said was healthy.

“We’ll not see a crazy pop, and maybe a 5-10% pop is what we in the industry consider good," he said. “Five or 10% will keep the flippers away."

Retail demand for the wave of IPOs by Chinese companies also appears to be increasingly selective.

In July, building materials maker BBMG Corp. saw the retail portion of its IPO subscribed more than 100 times and its shares jumped 65% on their debut.

But this week, Metallurgical Corp. of China Ltd fell 13% on its Hong Kong debut after the firm raised $2.3 billion, and real estate firm Glorious Property Holdings Ltd opted on Friday to price its IPO towards the lower end of its range.

Several retail investors in India said they would rather invest in already listed companies than have their money locked up for around 20 days in IPO applications.

India’s main 30-share index has more than doubled from its 2009 lows in March.

“I see no point in looking at IPOs where my funds are going to be blocked for a few days. I’d rather play around with that in the market and make myself some decent money," said Sachin Dholakia, a 31-year old software engineer.