National Buildings Construction Corporation Limited (NBCC) which had tapped the capital markets with its offer for sale by the Government of India was oversubscribed. The issue was for 1.2 cr shares in a price band of Rs 90-106 and had a discount of 5% for retail and eligible employees. The issue was open from Thursday the 22nd of March to Tuesday the 27th of March. The issue was overall subscribed 4.93 times with QIB’s and retail investors extending excellent support. Looking at the subscription and the way the book is built, it appears almost a certainty that the allotment would be done at the top end of the band or Rs 106.

The details of the subscription level in various categories are given below: –

The issue has been subscribed and what is important to note is the level of subscription and interest shown by retail investors. Approximately 13,000 applications have been received. The details about QIB subscription show that more than half or almost 54% is in the category of banks, insurance companies and financial institutions, who typically exit on listing. This could bring some pressure on listing. The comfort is that retail investors have backed the issue and the 5% discount will ensure that even if the stock comes under pressure initially it would recover thereafter. It looks like investors in the issue would make money going forward.

The pricing of the issue also proves one point that if a issue is reasonably priced, there will be subscription. The problem is that most merchant bankers and promoters believe that the price should be expensive and nothing should be left on the table for the investor. This is where the problem starts. Anyway NBCC is well received and credit for the same should go to the retail investors.