"Many negative factors are surrounding BMCL's share sale," the source said. "These are political turmoil, the recent reduction of BMCL's share-allocation ratio to institutional and foreign investors and the unfavourable stock market conditions."

Just before the IPO, BMCL cut its allocation ratio to institutional and foreign investors from 50 per cent to 35 per cent after they showed lukewarm interest during the book-building process, conducted before subscription to test demand among institutional investors.

However, any IPO shares left over from the subscription will be bought by the company's underwriters, led by Kim Eng Securities ( Thailand) Plc.

The subway operator started the subscription period on September 8 for 25 million of the 1.76 billion shares, exclusively allocated to retail investors at the Queen Sirikit National Convention Centre station.

The subscription period for the remaining shares allotted to retail investors through underwriters began on Monday and ends today.

The 1.76 billion shares are part of a batch of 2.7 billion shares available in the IPO. The remaining shares will be offered to institutional and foreign investors. The offer price is Bt1.31, down from an earlier forecast of Bt1.52 per share.

BMCL's offering, with a value of Bt3.61 billion, is the second-largest IPO this year, behind only Rayong Refinery Plc (RRC).

BMCL's managing director Sombat Kijalaksana said yesterday that the share allocation to retail investors would sell out.

"We offered only 25 million shares for sale to retail investors on September 8, but there was demand for 32 million. This reflects [the fact that] retail investors have an interest in long-term investment with us," he said.

"Shares allocated through underwriters will be successful. Some underwriters themselves might subscribe to the shares beacuse they want to invest in the company. This seems to be normal investment practice."

BMCL will start trading on the stock market on September 21, Sombat said, adding that the company's major shareholders will snap up stocks in case the share price falls below the IPO price, to maintain the level of their holdings.

"Major shareholders view the dilution effect [following the IPO] as being too much. Ch Karnchang's stake will be diluted by 50 per cent, to a 30-per-cent stake, and they have a policy to pile up additional shares," he said.