IPO, FPO » Anchor investor

Cox and Kings: Anchor Investors

Arun Kejriwal — Wed, 18 Nov 2009 05:53:58 +0000

Cox and Kings (India) Limited allotted shares to nine investors comprising of FII’s and domestic mutual funds. The IPO from the company has a 50% reservation for QIB’s and therefore 30% of the QIB category was offered to anchor investors. The issue has been subscribed at the top end of the price band which is between Rs 316-330. Details of the anchor investors are given below.

Emerging Markets Growth Fund	7,45,500
Capital International Emerging Markets Fund	3,54,500
T Rowe Price International A/c discovery Fund	5,29,000
JF Eastern Smaller Companies Fund	2,00,480
SBI Mutual Fund A/c MMPS 93	1,53,000
SBI Mutual Fund A/c Magnum Global Fund	1,53,000
Reliance Capital Trustee Co Ltd A/c Equity Oppurtunities Fund	3,06,000
Sundaram BNP Paribas Mutual Fund A/c Select Small Cap	1,51,500
Sundaram BNP Paribas Mutual Fund A/c Select Thematic FDS Entertainment Opportunity Fund	1,51,500
Total	27,44,480

The issue for all other investors opens today and would close on Friday the 20th of November 2009. Clearly the response to the issue from anchor investors is encouraging and given the fact that there are three Indian funds putting in money in five names and four FII’s, the interest seems good in an issue which has business interest across geographies and is to a very large extent insulated from vagaries of nature.

Indiabulls Power: List of Anchor investors

Arun Kejriwal — Sun, 11 Oct 2009 12:10:27 +0000

The list of anchor investors is given below. The total shares allotted to these eight anchor investors is 6,11,64,000 shares. This allocation would reduce the QIB portion from 20,38,80,000 shares to 14,27,16,000 shares. The shares to the anchor investors were allotted at the top end of Rs 45 of the price band of Rs 40 – 45. Readers would be aware that the shares allotted in the anchor investment category have a lock –in of one month from the date of allotment.

Sr. No.	Name of the Anchor Investor	No. of Equity Shares Allocated
1	Copthall Mauritius Investment Limited	21076650
2	Nomura India Investment Fund Mother Fund	7999200
3	The Nomura Trust & Banking Co. Ltd. as the trustee of Nomura India Stock Mother Fund	2799600
4	Indea Capital Pte Limited A/c Indea Absolute Return fund	2874900
5	Norges Bank A/c Government Petroleum Fund	5332650
6	BNP Paribas Arbitrage	10498950
7	Credit Suisse Singapore Limited	5249400
8	Macquarie Bank Limited	5332650
		61164000

The list is impressive and the response received was encouraging. This augurs well for the public issue which opens on Monday the 12th October 2009. The issue size which was earlier 33.98 cr shares has now reduced to 27.8636 cr shares.

Indiabulls Power Anchor Investors

Arun Kejriwal — Thu, 08 Oct 2009 15:17:31 +0000

Indiabulls Power Limited (IBPL) is entering the capital market with an IPO to raise between Rs 1359.2 crs and Rs 1529.1 crs. The issue opens on Monday the 12th of October 2009 and closes on Thursday the 15th of October 2009. The issue is for 33.98 cr shares in a price band of Rs 40 -45.

The QIB portion is for 20.388 cr shares and the company has an option to allot up to 30% of the QIB portion to Anchor Investors. This portion to Anchor investors comes with a lock in condition of 30 days from date of listing and Adani Power was the first company to allot shares to anchor Investors. Readers will recall that Indiabulls Power Limited post its DRHP filing had allotted shares to a number of domestic investors as part of its Pre-IPO allotment, but the same had to be subsequently cancelled as the company had not filed for such allotment in the draft document. Pre-IPO allotment comes with a lock in condition of one year from the listing of the shares. The price at which the IBPL placement was done was Rs 43.50.

Considering the above it would be fair to assume that investors in IBPL who were allotted shares in the Pre-IPO will come forward and become anchor investors of the company. The total number of shares to be offered in this allotment would be 6.12 cr shares. Assuming the allotment is done at the top end of the price band of Rs 45 it would raise approximately Rs 275 crs. The above allotment would be done on Friday the 9th of October 2009. The successful completion of the allotment to anchor investors would lead the way to a successful IPO as well.

Pipavav Shipyard: Issue Oversubscribed

Arun Kejriwal — Wed, 16 Sep 2009 08:54:57 +0000

Six anchor investors have applied for 1.52,72,950 shares at Rs 60 each for a combined value of Rs 91.6377 crs. This forms 30% of the QIB portion and comes with a lock in of one year from listing of the shares. Of the six anchor investors as many as five of them are new investors to the company and one of them is an existing investor. These anchor investors give comfort to the investing public and also demonstrate that this is an investment for the long term and they are confident about what they are doing. As mentioned earlier this investment comes with a lock in of one year.

Sr. No.	Name of the Anchor Investor	No. of Equity Shares Allocated
1.	Batterymarch Financial Management Inc. A/C Legg Mason Emerging Markets Trust	1,666,720
2.	Commonwealth Equity Fund Limited	5,176,160
3.	California Public Employee’s Retirement System managed by Batterymarch Financial Management Inc.	1,666,720
4.	GI India II	1,999,910
5.	India Diversified (Mauritius) Limited	2,499,970
6.	Marshal India Select Fund Limited	2,263,470
	Total	15,272,950

As of 1pm, the issue which opened for subscription today was oversubscribed. The issue was 1.41 times oversubscribed.

Pipavav Shipyard: Anchor Investor

Arun Kejriwal — Tue, 15 Sep 2009 10:18:19 +0000

4 anchor investors have put in bids in Pipavav Shipyard Limited. The bids are for 30% of the QIB portion and are roughly valued at Rs 32 crs. Details are not yet known but three of the four investors are new investors and one of them is an existing investor.

These shares of the anchor investor carry a lock in of one year from the date of listing.

Adani Power to list this week

Arun Kejriwal — Tue, 18 Aug 2009 04:50:35 +0000

Adani Power which completed its maiden IPO during the last week of July 2009 is to list this week on Thursday the 20th of August 2009. The issue was very heavily oversubscribed and was the first IPO which introduced the concept of ‘Anchor Investors’. The anchor investor is made an allocation of shares from within the QIB portion of the IPO of 60%. The anchor investor portion is 30% of the QIB portion or simply put 18% of the whole issue.

The point to note in the issue is that grey market premium during the time when the IPO was on was Rs 9 -10, while the cost of interest for the HNI was just about Rs 3.50 assuming 11.25% interest and 13 days as the duration. As long as the share trades above Rs 104, the HNI will be making money.

Adani Power Anchor investor Allocation & likely IPO allotment price

Arun Kejriwal — Wed, 29 Jul 2009 16:15:24 +0000

Adani Power Limited completed its anchor investment allocation. It allocated 5.28 cr shares which forms 60% of the QIB portion and 18% of the total issue to six investors at a price of Rs 95. There is a condition in the IPO which says that you cannot allot to anchor investors at a lower price than the other investors. However anchor investors can be allocated at a higher price. The company can therefore allot shares to the remaining investors who apply in the IPO at a price from Rs 90 to 100 which is the price band, but in all probability the allotment price now looks closer to Rs 95 as it may not be possible to charge a higher price to these investors today.

Anchor Investor

Arun Kejriwal — Mon, 27 Jul 2009 06:47:56 +0000

SEBI has introduced a new concept which is to be tried out for the first time during the issue of Adani Power. Typically the issue is divided into three categories of investors namely: – QIB’s (Qualified Institutional Investors) Non Retail or HNI’s and the retail category. A minimum of 30% of the issue is offered to retail, 10% to HNI’s and 60% to QIB’s with a reservation of 5% to mutual funds. This is in case where the offer is for less than 25% of the post issue capital.

In cases where the anchor investor comes in there is a reservation of 30% of the QIB portion for such persons. They are allowed to apply in the QIB category as well. The salient features of the scheme are that for such investors the issue opens one day before the issue opens for other people and closes on that first day itself. In case of Adani Power the issue for anchor investor opens and closes on 27^th July 2009. The primary difference in such investors is that they have a lock-in on their investment of thirty days. Normally all investors are allowed to sell on the first day of listing and there is no such lock in. This is a new experiment being tried out for the first time and some marquee investors are expected to put in bids on Monday in this issue.

Given below is the excerpt from the RHP of Adani Power on Anchor Investor.

Anchor Investor Portion as mentioned in RHP of Adani Power

The Company may consider participation by Anchor Investor in the Net Issue for up to 52,857,366 Equity Shares in accordance with the applicable SEBI Guidelines. The Anchor Investor Bid/Issue Period shall be one day prior to the Bid/Issue Opening Date. The QIB Portion shall be reduced in proportion to the allocation under the Anchor Investor category. In accordance with the SEBI Guidelines, the key terms for participation in the Anchor Investor Portion are as follows:

(a) Anchor Investors shall be QIBs as defined in the SEBI Guidelines.

(b) The Bid must be for a minimum of such number of Equity Shares so that the Bid Amount exceeds Rs. 100 million and in multiples of [·] Equity Shares thereafter. A Bid cannot be submitted for more than 30% of the QIB Portion.

(d) The Bidding for Anchor Investors shall open one day before the Bid/Issue Opening Date and shall be completed on the same day.

(e) The Company, in consultation with the GCBRLM, shall finalise Allocation to the Anchor Investors on a discretionary basis, subject to compliance with requirements regarding minimum number of allotees.

(f) The number of Equity Shares allocated to Anchor Investors and the price at which the allocation is made, shall be made available in public domain by the BRLMs before the Bid/Issue Opening Date.

(g) Anchor Investors shall pay Anchor Investor Margin Amount representing 25% on the Bid Amount at the time of submission of the Bid. Any difference between the amount payable by the Anchor Investor for Equity Shares Allocated and the Anchor Investor Margin Amount paid at the time of Bidding, shall be payable by the Anchor Investor within two days of the Bid/ Issue Closing Date.

(h) In case the Issue Price is greater than the price at which Equity Shares are allocated to Anchor Investors, the additional amount being the difference between the Issue Price and the price at which Equity Shares were allocated to the Anchor Investors shall be paid by the Anchor Investors. In the event the Issue Price is lower than the price at which Equity Shares are allocated to Anchor Investors, the allotment to Anchor Investors shall be at the higher price i.e. the price at which Equity Shares were allocated under the Anchor Investor Portion.

(i) The Equity Shares allotted in the Anchor Investor Portion shall be locked-in for a period of 30 days from the date of allotment in the Issue.

(j) The BRLMs or any person related to the BRLMs / Promoters/Promoter Group shall not participate in the Anchor Investor Portion.

(k) Bids made by QIBs under both the Anchor Investor Portion and the QIB Portion shall not be considered as multiple Bids.

(l) The payment instruments for payment into the Escrow Account should be drawn in favour of:

• In case of Resident Anchor Investors: “APL – Escrow Account – Anchor Investor”

• In case of Non-Resident Anchor Investor: “APL – Escrow Account – Anchor Investor – NR”

The Red Herring Prospectus, in so far as it relates to terms of the Issue should be read in conjunction with theafore stated paragraphs, to the extent applicable.

There is one area of confusion about the day that lock in begins. RHP says the date of allotment. The intention of SEBI is very clear that there should be a lock in of thirty days between Anchor investor and other investors. We would probably know the exact conditions a little later on.