MSTC gets listed at a discount

There is a brand new listing on the bourses today. PSU, MSTC got listed on the BSE at Rs.111 v/s the lower price band of the IPO price at Rs.120, discount of 7.5%. It later went on to hit the 5% UC at Rs.116.55 and is now trading at Rs.115 levels.

The IPO got fully subscribed only on the last day, getting subscribed 1.12 times. The Govt holding, post the IPO has come down from 90% to 65% now.

The response to the IPO was so poor, it had to extend the closing date and bring down the price band from Rs.121-128 to Rs.120-128.

In our IPO analysis, we had said - Fluctuating reported profitability and poor collection cycle weigh adversely on the financials, besides few business risks highlighted above.  Best is to wait for financial results for few more quarters before taking a call on the stock. In the meantime, one can always focus on the action-packed secondary markets. Hence skip this IPO for now, as PSU tag is not seen too exciting as well.