nhpc ipo
MUMBAI: Public sector utility major NHPC’s $1.25-billion initial public offer (IPO), which closed on Wednesday, was subscribed more than 23 times, fuelling hopes that this overwhelming response may enthuse the government to fast-track divestment in other firms.
Merchant banking sources said the qualified institutional buyers (QIBs) portion of the issue was subscribed 29 times, the high net worth individuals (HNI) portion was subscribed 56 times and the retail book was subscribed about 3 times till 6:00 pm on Wednesday. NHPC is the first IPO by a government-owned company in 18 months and given the response, industry experts expect the deal to be priced at the top end of its indicated range of Rs 30-36 per share. NHPC’s price range represents a valuation of roughly 1.8 times its book value.
“It’s a hydro-power company and deficient monsoon is not good news. Despite that perception, the response has been more than good,” said an official at one of the merchant bankers to the issue. Foreign institutional investors, who bid for the issue, included T Rowe Price, Fidelity, US fund Wellington Financial, Batterymarch, Morgan Stanley and HSBC Offshore, and domestic insurance major LIC, mutual funds Reliance, Prudential ICICI and Bajaj Alliance, to name a few.
NHPC’s public issue follows that of private-sector utility Adani Power IPO, which raised about $630 million and was more than 20 times subscribed.
Going forward, more than a dozen PSU companies are said to be considering IPOs or follow-on offerings, as the government looks to trim the fiscal deficit. Another state heavyweight, Oil India, is said to be readying a $500-600-million IPO in September.
Indian companies have so far raised about $726 million through six share offering year to date against $4.3 billion for the calendar year 2008. Enam Securities, Kotak Mahindra Capital Co and SBI Capital Markets were lead book managers in the NHPC deal.
MUMBAI: Public sector utility major NHPC’s $1.25-billion initial public offer (IPO), which closed on Wednesday, was subscribed more than 23 times, fuelling hopes that this overwhelming response may enthuse the government to fast-track divestment in other firms.
Merchant banking sources said the qualified institutional buyers (QIBs) portion of the issue was subscribed 29 times, the high net worth individuals (HNI) portion was subscribed 56 times and the retail book was subscribed about 3 times till 6:00 pm on Wednesday. NHPC is the first IPO by a government-owned company in 18 months and given the response, industry experts expect the deal to be priced at the top end of its indicated range of Rs 30-36 per share. NHPC’s price range represents a valuation of roughly 1.8 times its book value.
“It’s a hydro-power company and deficient monsoon is not good news. Despite that perception, the response has been more than good,” said an official at one of the merchant bankers to the issue. Foreign institutional investors, who bid for the issue, included T Rowe Price, Fidelity, US fund Wellington Financial, Batterymarch, Morgan Stanley and HSBC Offshore, and domestic insurance major LIC, mutual funds Reliance, Prudential ICICI and Bajaj Alliance, to name a few.
NHPC’s public issue follows that of private-sector utility Adani Power IPO, which raised about $630 million and was more than 20 times subscribed.
Going forward, more than a dozen PSU companies are said to be considering IPOs or follow-on offerings, as the government looks to trim the fiscal deficit. Another state heavyweight, Oil India, is said to be readying a $500-600-million IPO in September.
Indian companies have so far raised about $726 million through six share offering year to date against $4.3 billion for the calendar year 2008. Enam Securities, Kotak Mahindra Capital Co and SBI Capital Markets were lead book managers in the NHPC deal.
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