GreenSignal Bio Pharma Ltd on Tuesday withdrew its initial public offering after failing to garner sufficient bids from institutional investors, as it bore the brunt of stock-market volatility after the Indian government’s shock decision to ban high-value currency notes and Donald Trump’s surprise victory in US presidential elections.

The failure came despite the Chennai-based company lowering the issue price band and twice extending the bidding date by a total of six days. It also marks the first IPO to fail after edible oil maker NCML Industries Ltd withdrew its offering due to poor investor response in January 2015.

GreenSignal Bio informed stock exchanges that it was withdrawing the issue after the portion reserved for institutional investors remained just 21% covered at the end of the extended period.

A senior executive in the merchant banking division of Indian Overseas Bank, the sole financial adviser to GreenSignal’s IPO, said the company scrapped the issue due to insufficient bids from institutional investors. “We will assess the market situation and may possibly look at an IPO again sometime in early FY18,” the executive said, requesting anonymity.

The maker of tuberculosis vaccines required full subscription in the institutional category for the issue to succeed, as stipulated under capital market regulations. The company had reserved 75% of the issue for institutional investors. According to capital market regulations, if at least 75% of the net issue cannot be allotted to institutional investors then the company must return the application money.

The fear of the IPO failing also saw retail investors cancelling their applications. The portion reserved for retail investors was covered 8.46 times on Tuesday, compared with 8.58 times on Monday, 8.83 times on Friday and 8.91 times a day prior, stock-exchange data showed.

GreenSignal aimed to raise as much as Rs 116 crore initially, but later trimmed the target to up to Rs 110 crore after it revised the price band to Rs 68-76 a share from the original Rs 76-80.

Although the overall issue was fully covered at the end of the extended six-day issue period last week, the firm did not manage to attract even a single bid by an institutional investor. It then extended the issue again, which helped it get some traction from institutional investors on Monday.

India’s IPO market had picked up pace after four years of slow activity in mid-2014 when the BJP-led government took over. In 2015, 21 companies raised close to Rs 14,000 crore, as per stock-exchange data. So far this year, 26 companies have tapped into primary markets, collectively raising more than Rs 20,000 crore.

The healthcare sector has been one of the best performers in terms of share price movement after listings. For instance, drugmaker Alkem Laboratories Ltd, which went public last December, is trading at a 60% premium to its IPO price.

Stock markets have slumped since the 8 November announcement by Prime Minister Narendra Modi to ban higher-value Rs 500 and Rs 1,000 currency notes. The BSE’s 30-stock benchmark Sensex has declined roughly 6% since then. 

Outflow of foreign funds has made matters worse. Foreign portfolio investors have pulled out Rs 3,470 crore (about $510 million) from the equity cash segment in the past two weeks, as per stock-exchange data. 

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