The IPO of Indiabulls Power Limited closed for subscription yesterday. It received excellent response from institutional investors and reasonable response from HNI’s and just about enough from retail investors.
| QIB | 40.4942 |
| HNI | 5.7636 |
| Retail | 1.0913 |
| Overall | 21.84 |
The company had come out with its IPO in the price band of Rs 40-45 and the issue was for 33.98 cr shares. The company had made an allocation of 6.11 cr shares at Rs 45 to anchor investors prior to the public offering of shares.
The response overall is better than Adani Power which had a total subscription of 21.64 times. The HNI category in Adani Power was oversubscribed 8.62 times while the retail was 2.96 times. The QIB was 39.47 times. There were a couple of differences between the two issues. Firstly there was a lot of hype created and generated during the issue of Adani Power. This time around there was none whatsoever. The issue of Indiabulls Power came and went. Secondly investors were expecting to make huge money in Adani Power post listing which did not materialise. As a result of this failure, the response this time from HNI’s and retail is muted. Probably this lack of expectation will make the difference and of course the fact that the issue is reasonably priced.
This muted response from the HNI and retail will be the icing on the cake for this issue. Readers would recall my view on this company in my issue analysis where I had stated that this issue is attractively priced and far cheaper than Adani Power. The stock of Adani Power which listed on 20th August has been trading in a narrow range around the issue price of Rs 100. The high in about two months of trading has been Rs 107.90 made on listing day and the low Rs 97.25. The stock closed at Rs 100.15 yesterday. It may be of interest that in the same period the BSESENSEX has moved from 15012 to 17195, a gain of 2183 points or 14.54%.
It may also be relevant to look at the issue of NHPC which was issued at Rs 36 and listed on 1st September. The stock made a high of Rs 39.75 on listing day and a low of Rs 32.45 yesterday. The share closed for trading at Rs 33.50 yesterday.
Looking at this scenario, I am of the firm belief that investors who have reposed faith by subscribing to the IPO of Indiabulls Power Limited will make money in this issue.
