Receives record subscription from HNI’s and excellent response from retail investors
Gravita Limited which had tapped the capital markets with its IPO for 36 lakh shares received excellent response and was oversubscribed 43.88 times. The issue was in a price band of Rs 120-125 and the issue would have raised Rs 45 crs at the top end of the price band. In recent times five issues have seen subscription by HNI’s cross into three digits but the figure of 182.52 times is indeed huge by all standards. Even if one were to consider the size of the issue as being small and overlook the subscription figure or give it lower weightage, the subscription figure stacks up very well for the company.
Recent examples where the HNI subscription figure crossed into three digits are when ARSS Infrastructure Projects Limited was subscribed 124.52 times. This issue was open during December 2010.The second instance was Infinite Computer Solutions was subscribed 106.01times. This issue had opened in January 2010. The next instance was of Man Infraconstruction Limited which was subscribed 104.57 times, and this issue was open for subscription in February 2010. The fourth instance was of Career Point Infosystems Limited which was subscribed 101.93 times and this issue was in September 2010. The last instance was of VA Tech Wabag also in September 2010, where the subscription level was 100.98 times.
The cost of funding for HNI’s who have subscribed for 182.52 times bid for 9,71,91,900 shares against their reservation of 5,32,500 and the total issue size of 36 lakh shares. An investor in this category who has leveraged his money and borrowed for subscription would effectively pay Rs 56.25 per share as interest cost. This calculation is based on the assumption of 10% interest for a period of nine days. The cost is huge and is likely to see some withdrawals in the next couple of days.
The details of the subscription level in various categories are given below: –
| Category | Shares Offered | Shares Subscribed | Times |
| QIB | 1775000 | 10714700 | 6.04 |
| NII | 532500 | 971919900 | 182.52 |
| Retail | 1242500 | 46394750 | 37.34 |
| Employee | 50000 | 58500 | 1.17 |
| Overall | 3600000 | 154359850 | 42.88 |
The company has garnered support for 15.43 cr shares or total bids are for Rs 1,929.49 crs against the amount to be raised of Rs 45 crs.
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