Overall subscription 53.89 times
The first IPO of the calendar year 2011 has created a storm and was subscribed a staggering 54 times. The issue received great response from all categories of investors whether QIB, HNI or retail. The IPO which was priced in a band of Rs 860-1032 was an offer for sale and there was no fresh issue. The issue size was 64,27,378 shares and there was a reservation of 2.5 lac shares from employees reducing the issue size for the public to 61,77,378 shares. The company had also done an allocation to Anchor investors of 9,26,607 shares which was done at the top end of the price band of Rs 1032. The issue had opened on Wednesday the 22nd of February and closed on Friday the 24th of February.
The details of the subscription level in various categories are given below: –
| Category | Shares Offered | Shares Subscribed | Times |
| QIB | 2162083 | 106192932 | 49.12 |
| NII | 926607 | 139313544 | 150.35 |
| Retail | 2162082 | 52190634 | 24.14 |
| Employee | 250000 | 44034 | 0.18 |
| Overall | 5500772 | 297741144 | 54.13 |
The cost of funding for the leveraged HNI varies from 9% to 11%. Depending on the rate of interest the per time funding cost varies from Rs 2.035 per time to Rs 2.488 per time. The issue is subscribed 150.35 times or 150 times which makes the cost of interest Rs 305.25 at 9% and Rs 373.20. The grey market premium currently at close of the bidding was Rs 375 and has to go up if the HNI investor has to make money in the issue.
MCX has proved a point once again that if issues are reasonably priced leaving something on the table for the investor, there is appetite for primary issues. One hopes promoters of companies and merchant bankers take this as a learning experience and implement the same when bringing issues to the market.The issue has created substantial interest in the primary market and it would be interesting to see whether the pipeline of IPO’s get activated with this issue or not?
