The Hindu Business Line : Petronet LNG closes below offer price on Day One

SEEING IS BELIEVING: Mr Suresh Mathur, CEO & MD, Petronet LNG Ltd, looking at the Bombay Stock Exchange screen during the listing ceremony of the company's shares on Friday. — Paul Noronha

Mumbai , March 26

THE IPO of Petronet LNG made its debut on the stock exchanges on Friday amid bearish market sentiment with the shares of the company closing below the offer price of Rs 15.

In Friday's trading on the NSE, the issue opened at Rs 17, also the day's high, touched a low of Rs 12 and closed at Rs 14.65, down by 2.33 per cent compared to the offer price of Rs 15. On the BSE also, it closed at Rs 14.65.

A total of 72.59 lakh shares were traded on the BSE; on the NSE, 1.66 crore shares were traded. Out of the total traded shares, 42.89 per cent were for delivery on the NSE; delivery data on the BSE was not available.

Petronet came out with an IPO for 26.09 crore shares at a price band of Rs 13-15 per share for the expansion of the LNG terminal.

Brokers said the stock price closing below the offer price was due to the company's expansion plans yet to be completed. "There is no business till now for the company and so, no revenue and profit. There is not much value for the stock in the short term," said an analyst with a foreign broking firm.

An analyst said there could be some more selling in the short term from investors who had subscribed to the IPO on expectation of immediate returns on listing.

The analysts are expecting the company to report losses in the first two quarters after its operations. However, they said there is good value in the stock for long-term investors.

"Due to the good demand for LNG and the product of the company already being sold out, there are no concerns in the long term," he said.