Even as more and more companies look to raise money from the stock market by floating their shares -– June has set a record -– the enthusiasm of the retail investors looks to be subsiding.

The retail portion of only two out of 72 issues that hit the market in 2005 remained undersubscribed. The number was six out of 86 the next year.

However, this year so far, as many as nine of 50 issues did not see their retail portion fully subscribed.

The enthusiasm of the retail investors has been subsiding as the premiums demanded in public offers rise and more and more stocks list below the issue price.

In 2005, only five companies that floated their shares listed below the issue price. The number increased to 13 in 2006. This year, 16 out of the 50 debuted below the issue price.

The listing day returns too have declined. The number of stocks debuting at 50 per cent premium declined from 13 in 2005 to 10 the next year and is down to only six so far this year.

An analyst at Anand Rathi Securities talks of a non-linear relation in which the average listing gain increases as the issue size increases, but only up to Rs 150 crore. After that, it declines.

Many of the highly oversubscribed issues, in fact, brought bad news for investors due to inter alia high interest cost on the invested fund. At the aggregate level, however, all classes of investors received positive return on investments.

Besides, if you were to look longer back in time, there is no cause for alarm. As many as 208 public issues hit the market in the last 30 months, of which 161, or over 77 per cent, had their retail portion subscribed two times.

Of the rest, 30 were at least fully subscribed while only 17 were left with some unsubscribed portion. The 208 public issues raised Rs 73,232 crore, of which retail investors accounted for over 30 per cent.