MUMBAI -- The $570 million initial public offer of Oil India Ltd. was fully subscribed within an hour of its opening Monday, suggesting that investor appetite for Indian share sales is still alive.
"The issue has been fully subscribed. Most of the bids are at the top end of the price band," an investment banker, who didn't wish to be named, told Dow Jones Newswires.
The issue has been priced in an indicative band of 950 rupees ($19.5)-1,050 rupees.
Latest data from the National Stock Exchange - which doesn't include bids on the Bombay Stock Exchange - showed the issue was subscribed 0.91 times.
The issue of nearly 26.45 million shares received almost 24.05 million bids, according to data on the NSE Web site. Bidding for the issue closes Thursday.
Earlier in the past fortnight, Adani Power Ltd. and NHPC Ltd. made muted debuts on the bourses, despite encouraging subscriptions, raising questions on investor appetite for fresh paper.
Market participants expected a spillover from these muted debuts to affect sentiment towards Oil India.
The Indian primary markets have seen fresh activity over the past couple of months after a 15-month lull, following the global credit crisis.
"The book getting fully subscribed seems to be bids from the qualified institutional subscribers, which isn't really exciting and along expected lines. Subscriptions on the retail and high net worth individual section is a better indicator of investor sentiment," said National Stock Exchange member S.P. Tulsian.
The oil and gas company intends to use the issue proceeds for exploration activities, developing its production fields and buying equipment.
At least 60% of the net issue will be allocated to qualified institutional buyers, 10% to high net worth individuals and the remaining 30% to retail investors.
JM Financial Consultants Pvt. Ltd., Morgan Stanley Co. India Pvt. Ltd., Citigroup Global Markets India Pvt. Ltd. and HSBC Securities & Capital Markets (India) Pvt. Ltd. are the lead arrangers to the issue.
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