The OFS (Offer for sale) from RCF was yet another bailout for the government. The OFS was for 689.61 lac shares with a floor price of Rs 45. The offer received bids for 889.67 lac shares or 129.01% of the offered quantity, indicating that the issue was oversubscribed. The unfortunate part is that the indicative price was Rs 45.02. The tick size is 0.05 Rs or 5 paisa. Allotment of 65% of the bid quantity has been made to bids coming at the floor price. With hardly any response from HNI’s, QIB’s and retail investors it appears that the bidding has been done by the state insurance company LIC and other financial institutions.

The amount mopped up from this issue is about Rs 311 crs and is insignificant compared to the divestment in the case of NMDC and NTPC. Those issues received response from all quarters simply because the price was right. With a couple of issues from SAIL and NALCO likely to hit the market in the remaining couple of weeks before the financial year 2012-13 ends, one hopes the government gets its pricing right to attract investors from all segments just not the bailout ones.

The share price gained on Friday compared to the previous day and traded above the floor price of Rs 45, finally closing at Rs 45.45 on the BSE. The industry and the company have not been doing too well and therefore there is lack of interest in the stock. In terms of trading volumes the same were significantly higher on Friday with the OFS happening on expected lines. The BSE saw traded volumes of 8.77 lac shares with 44.14% delivery volume. The average traded volume is 2.39 lacs. The NSE saw traded volumes of 31.83 lac shares with 48.11% being delivery volume. It would be interesting to see how the share behaves with the OFS out of the way and there being no further price pressure on account of increased stock being available.