Three months after the last initial public offering, an internet service provider said it plans to go public on Wednesday.
According to a notice seen on the Tehran Stock Exchange website, the newcomer is Asiatech Data Transmission Company, a tech company that provides IT-based services.
The company plans to sell 15% or 300 million shares to become the 593rd company listed with the TSE.
With each share to be priced at 6,060-6,660 rials, the company hopes to make 1.9 trillion rials ($7.2 million) from the share offer.
Shares are to be priced via the book-building mechanism. Book-building is a process by which an underwriter seeks to set the price at which an IPO is offered. Price discovery involves recording investor demand for shares before arriving at the issue price.
Despites a long-list of companies waiting in the IPO queue, the last time the Securities and Exchange Organization, the capital market regulator, allowed an IPO was in February. At that time the IPO got a cold shoulder due to bearish stock market.
The regulator has decided to resume IPOs apparently because the bourse is showing some signs of recovery thanks to the return of retail investors and fresh liquidity.
Investor turnout during the latest IPO was almost a fifth of the participation during the heydays of the stock market less than two years ago.
A glance at IPO data shows that investor turnout for IPOs reached its zenith in September 2020 when 5.5 million partook in the offer by Gostar Pars Energy Company.
After that the number of investors plunged reaching 4.2 million in the offer by Sepidar System Company, a software company. The downward spiral continued and fell further to 3.7 million when Tabas Parvardeh Coal Company went public. During the share offer by a less-known poultry Company in July 2.83 million trading codes participated.
Observers see the low turnout as a threat to the inflow of liquidity into the struggling market but also a natural response by millions of retail investors long on the receiving end of bourse.
IPOs offered high returns amid the frenzy of buyers rushing to make a profit. But with stock market indicators plummeting since August 2020, share prices of many newly listed companies plunged well below those set in the IPOs and in the process making millions of loss-making investors more nervous.
