MUMBAI: Large institutional investors seem to have reposed their faith in initial public offerings with the huge oversubcriptions witnessed last week by the two public issues -- Tech Mahindra and GMR Infrastructure.

However, the smaller investors are still in a cautious mood after the mauling witnessed by a number of IPOs that came after Reliance Petroleum's public issue in April this year and this was evident from the relatively weak response that GMR and Tech Mahindra recieved from retail investors.

Tech Mahindra IPO was oversubcribed by over 72 times, only around eight times for the shares reserved for retail investors.

In case of GMR Infrastructure, the retail portion was not even fully subscribed, although the issue was oversubscribed by nearly seven times in total.

The retail portion of the Tech Mahindra issue was oversubscribed by 7.84 times while the retail investor portion of GMR got bids for 52 per cent of the offer.

However, both the IPOs received robust response from the Qualified Institutional Buyers (QIBs), particularly the foreign investors, with Tech Mahindra receiving over 104 times subscription from Qualified Institutional Buyers (QIBs) while MR IPO got oversubscribed by 11 times.

"There is never a bad time for good issues. Despite skepticism for IPOs, investors have shown huge interest in the Tech Mahindra and GMR public offers," said Prithvi Haldea of Primedatabase, which tracks primary capital market.

The huge oversubcriptions for the two IPOs, particularly the Tech Mahindra issue, comes on the back of a lacklustre response to most of the IPOs that hit the capital market after a successful IPO of Reliance Petroleum Ltd in April.

RPL IPO was oversubcribed by more than 51.2 times and the issue price was fixed at Rs 60 per share near the top end of its price band of Rs 57-62 per share.

However, the stock market had witnessed a sharp downslide after hitting a life-time high of 12,671.11 on May 11, the same day when RPL was listed on the bourses.

"Companies with strong fundamentals will always do good in the primary markets and the robust response to both the IPOs shows the huge investor appetite for new entries in the capital markets," Haldea said.

Though he said oversubcription for the GMR Infrastructure was relatively low but with two fundamentally strong IPOs coming together, one has to suffer.