Mumbai: Within a span of less than three months, two companies have withdrawn their initial public offerings, together worth over Rs 200 crore, amid sluggish investor sentiments.
Garments manufacturer Scotts Garments withdrew its public offer last week after failing to generate sufficient investor interest even after extending the duration of the issue and lowering the price band.
This was the second IPO to be withdrawn this year, after a failed attempt to raise funds through an IPO by Sai Silks (Kalamandir) Ltd in February.
Sai Silks' Rs 89 crore issue was withdrawn on February 18, 2013.
"Retail investors are mostly staying sidelines and are not participation in the stock market. Due to the sluggish retail demand, the IPO market is not picking up," said Alex Mathews, Research Head, Geojit BNP Paribas Financial Services.
The IPO of Scotts Garments received bids for only 27 percent of the 1.05 crore shares on offer, according to data available on the NSE.
Retail investors had bid for six percent of the 35.19 lakh shares reserved for them.
Non-institutional investors category was subscribed 39 percent, while qualified institutional buyers portion received 36 percent subscription and employees 23 percent.
The company's original issue period was from April 25-29. This was later extended to May 3. The price band at which investors could bid for shares of the company was cut from Rs 130-132 to Rs 118-120.
Last year, three firms -- packaging materials maker Plastene India, healthcare firm Goodwill Hospital and auto parts manufacturer Samvardhana Motherson Finance, shelved their IPOs, worth a total of Rs 1,805 crore.
Since 2010, as many as eight companies have withdrawn their public offers.
Still, quite a few companies, including Jyoti CNC Automation, BSCPL Infrastructure, Ortel Communications, Wonderla Holidays, NCML Industries and Advanced Enzyme Technologies, have filed their draft documents with capital market regulator SEBI (Securities and Exchange Board of India) since the beginning of 2013 to raise funds through IPOs.