Indiabulls Power, a subsidiary of Indiabulls Financial Services and a company backed by UK-based billionaire LN Mittal’s LNM India Internet Ventures, on Friday got lukewarm response from investors on its debut trading at the bourses.

Not ready for Power IPOs! Perhaps this is what the investor fraternity wants to tell corporate India.

Experts say no lessons seemed to be learnt from the setbacks suffered by Adani Power and NHPC’s issues as Indiabulls power IPO also faced the same investor apathy.

The IPO opened at a price Rs 45.05 against an issue price of Rs 45 and touched a low of Rs 35.35, translating into a drop of 21.4 per cent on the first day.

Later, the stock closed at Rs3 5.50, which is a drop of 12.3 per cent.

The lack of visibility of the projects on ground was one of primary concerns for the such a dismal debut performance despite having a POWER packed backing of L N MIttal.

“There are absolutely no fundamentals in the stock which could drive it. The projects are five-years away. May be it goes down more after the market consolidates. It can be paid Rs 22-25 only given the risk of project completion,” said Ajay Srivastav, MD of Dimensions Consulting.

The company raised Rs 1,300 crore from the initial public offering. The proceeds from the IPO are to be invested in three upcoming power plants with a total aggregate capacity of 3975 mega watt. The first power plant of the company will come up in Amravati by 2012 end.

“The issue was highly priced from the beginning and even at a closing price of Rs 39, we would like to sell and a poor markets also had an impact. But this will not impact the follow-on public offers coming from NTPC and REC as they are known players,” said Hitul Gutka, research analyst at India Infoline.

With three successive power IPOs failing to tickle investor interest and generate expected response, will the government start rethinking its divestment policy.

Especially when a host of state-run power companies like NTPC, REC and Satluj Jal Nigam are planning to hit the capital market soon?

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