Credit Analysis and Research Limited (CARE) which had tapped the capital markets with an offer for sale of Rs 71.99 lac shares at a price band of Rs 700-750 and was subscribed handsomely. The issue had opened on Friday the 7th of December and closed on Tuesday the 11th of December. The issue was to raise Rs 540crs from the offer for sale.

The issue received excellent response and was subscribed 41 times with the best response coming from HNI’s. HNI’s subscribed to the offer 111 times while QIB’s subscribed almost 46 times. The retail category was subscribed 6.18 times. One must remember that allotment rules have been changed in the retail category and all applicants are first allotted the minimum lot before any surplus is allotted to other applicants. The total number of applications in this issue is about 3.3 lakhs which means that the average size per applicant is about 50 shares. The value of this application becomes Rs 37,500 against a normal average of Rs 1 lakh per application. The allotment to each successful applicant would be 20 shares and the ratio would be roughly 1 successful allotment for every 2.5-2.6 applicants. Yet another similar way of conveying the same would be 2 out of 5 applicants would get 20 shares and this would be irrespective of the size of the application. The issue would be priced at the upper end of the price band of Rs 750 and is likely to list around Christmas time.

Clearly the success of this issue indicates that if money is raised at reasonable prices there is appetite for fresh investment.

The details of the subscription level in various categories are given below: –

BhartiInfratel Limited (BIL) which is tapping the capital markets with its issue for 18.89 cr shares in a price band of Rs 210-240 completed its allocation to anchor investors yesterday. The company allotted a total of 2,83,35,000 Equity shares at a price of Rs 230. The allotment was made to 34 entities but only 12 institutions. There was excess demand of 8.32% over the QIB book and the same has been allocated on a discretionary basis.

A closer look at the key entities who have been allotted shares gives a much distorted picture of the entire anchor book. Morgan Stanley is allotted 101.85 lakh shares which is 36% of the book. Similarly Citigroup has been allotted 52.1 lakh shares or 18.4% and Wellington Management 36.87 lakh shares or 13%. There is just one domestic institution who has applied Sundaram Mutual Fund who has been allotted 9,78,500 shares or 3.45% through 18 entities. It is indeed surprising that in such a large issue just one domestic institution or mutual fund has chosen to join as anchor allocation.

One wonders whether the pricing is the concern or the industry in which BIL operates itself is the concern. Answer to this question would be available once the issue closes for QIB’s and HNI’s on Thursday the 13th of December and for retail investors on Friday the 14th of December. The company would be raising through the issue at the upper end of the price band of Rs 240, a total of Rs 4,533.6 crs. The issue consists of a fresh issue of 14.623 cr shares and an offer for sale of 4.267 cr shares by 4 private equity investors.

The complete list of allocation is given below:-