Puravankara Lowers IPO Price Band

The subprime woes have dragged US housing into a slump and the ripples from that have hit India's markets as well. The first casualty is Puravankara. It has been forced to re-price its IPO when it got few takers at the current price. Market regulator SEBI has also endorsed company's move. Puravankara has extended its IPO closing date to August 8 from August 3. It has also lowered its IPO price band to Rs 400 - 450/share from Rs 500 - 525/share. The company says that market volatility has forced it to re-price the issue. At the new prices, Puravankara will be able to raise only Rs 900 crore as against earlier Rs 1127 crore. The IPO, which opened on July 31 and was supposed to close on Friday, got a very poor response. So far the issue got only 36 per cent subscription. However, the management had different reasons to postpone the issue. Realty stocks across board got hammered in the recent market melt down. DLF down 15.7 per cent from its 52 week high of Rs 714. Unitech has lost 13.9 per cent from its all time high of Rs 623, Sobha Developers shed 26.6 per cent from its 52-week high and Parsvnath crashed 43.8 per cent from its all time high. Merchant bankers say that with the downward revision of IPO price, investors now can bid for larger pie of shares.