At a time when primary market offerings are a dime a dozen and listing success stories are aplenty, there are also issues whose post-listing performances have not really set the bourses on fire. Let's turn the torch-light on two such companies -- India Infoline [Get Quote], which made an IPO, and Jindal Polyfilms that made a subsequent public offer.

JPFL entered the market on June 9, 2005. The face value of its shares, which are listed at the NSE and the BSE, is Rs 10. The issue -- with an upper size cap of Rs 300 crore (Rs 3 billion) -- was made through the book-building route and the price band ranged from Rs 360 to Rs 400 per share.

The issue proceeds were earmarked for JPFL's plants at Nashik in Maharashtra and Khanvel in Dadra and Nagar Haveli. The expansion the company has undertaken is highly capital intensive and involves a cost of Rs 650 crore (Rs 6.5 billion).

Given the relatively long gestation period of 15 months from the issue date, time and cost overruns must possibly be factored in. The same could be aggravated by a possible hike in interest rate.

Concerns include JPFL's inherent business risks like the threat of obsolescence, the increasing possibility of the European Union and the USA imposing or increasing anti-subsidy and ant-dumping duties, a likely reduction in customs duties for key products and environmental regulations.

Then, there is the disturbing fact that the promoters have not always lived upto their promises after public issues in the past, and issued a liberal 1:1 bonus for preference shareholders just prior to the issue.

Positives include satisfactory demand growth expectations, possible contract manufacturing opportunities, fair international market-reach and state-of-the-art manufacturing facilities.

Overall, negatives far overshadow positives and the real bait for investors was around 20 per cent arbitrage on offer over the prevalent market price at the time of the issue.

Though the response to this issue was modest those who took the bait soon found the premium vanishing and are now staring at a stock on the decline notwithstanding a booming market.

India Infoline, on the other hand, entered the market on April 21, 2005, with a public issue of 1.18 crore equity shares with a face-value of Rs 10 each. The company's shares have been listed at the NSE and the BSE.

The issue was made through the book-building route and the price band ranged from Rs 70 to Rs 80 per share, translating into an issue size of around Rs 83 to Rs 95 crore (Rs 830-950 million). The issue proceeds were earmarked for setting up a new centralised office, investing in subsidiaries and general corporate purposes.

India Infoline primarily provides media content and research while its subsidiaries are engaged in e-broking, distribution of insurance and mutual-fund products, and research and information services. Close to two-third of its revenues are derived from the equity broking business, and it enjoys a 21 per cent share in the online broking business.

India Infoline's other strengths include multiple product offerings, integrated technology platform and a pan-Indian distribution network. Both India Infoline.com and its subsidiary 5paisa.com have brand recall value and facilitate customer development as the company expands across the country (the trademark registration of the former is still pending).

India Infoline is engaged in a highly competitive segment where large banks enjoy a 'one-stop-shop' advantage. Finally, the issuance of 52 lakh shares to the promoters at Rs 10 just two months prior to the IPO definitely dampened enthusiasm.

India Infoline's valuations still appear stretched when pegged against those of Indiabulls [Get Quote], which came up with its IPO recently.

The fortune of companies like India Infoline hinges significantly on stock market conditions. Hence, there might still be a case for a look in here by investors with a higher risk appetite and the willingness to bet that the ongoing bull-run will continue unabated.

So, while there is no dearth of offerings in the primary market, it makes good sense for investors to be a trifle more discerning. In fact, investors need to educate themselves better on the need to adopt an entirely different approach if a listed company comes up with a subsequent public offer.

Simply playing the arbitrage game amounts to being reduced to hoping that the differential premium existing in the secondary market does not vanish before fresh shares find their way to the market.

Those who adopted this flawed investment strategy in the subsequent public issues of Punjab National Bank [Get Quote], Allahabad Bank [Get Quote] and Jindal Polyfilms, found their gains illusory and disappearing rapidly as the listing date of the freshly allotted shares approached.

In such issues, taking a long-term call is obviously the better strategy. Furthermore, a call also needs to be taken on whether one would be better served by picking shares directly off the secondary market or from the primary market.

Investing in the primary market is now fraught with risks similar to those in the secondary market. After all, as the saying goes 'a known devil is always better than an unknown one'.