Mumbai: The Anil Ambani-controlled Reliance Power Ltd’s public float that saw subscriptions of $190 billion has the who’s who of international investors putting in bids for the company’s shares.
According to a source close to the development, foreign institutional investors (FIIs) accounted for nearly half the demand for the issue. FIIs such as Deutche Bank, UBS Securities, ABN-Amro Securities, Macquarie Securities and Merrill Lynch have put in bids ranging from $13.9 billion to $1 billion for shares on offer to institutions.
The George Soros-controlled Quantum Fund is said to have put in a bid of $1.6 billion.
Except Quantum, the other investors were also managers to the issue. The issue is expected list on 8 February.
Under current Sebi rules, the allotment of shares to Qualified Institutional Bidders (QIB) will be proportional to the bids received. Earlier, investment bankers had discretion in terms of allotment to institutions. Sebi changed the rules 2005, after allegations investment bankers were playing favourites in the markets.
The source said Deutsche Bank was the highest bidder at $13.9 billion for 10.93% of the shares, while UBS bid $12.5 billion for 9.91%. ABN-Amro put in a bid for 9.12% of shares on offer at $11.6 billion.
Investors submit application forms for the Reliance Power Initial Public Offering at an outlet for Reliance Money. While the offer price has been fixed at Rs450 a share, retail investors get a Rs20 discount and will pay Rs430
Other FII investors include JP Morgan and Merrill Lynch. They bid $1.6 billion each , while Macquarie Securities bid $1.22billion for a 0.96% of the pie. In addition a JPMorgan off shore fund has bid for 5.09% of the shares at $6.47 billion.
Of the 26 crore shares on offer, 60% is reserved for institutions, 10% for high net-worth individuals and 30% for retail investors.
However, biggest demand came from Indian institutions, with Nimesh Kampani’s JM Financial Ltd bidding for 24.31% of shares at $30.9 billion and Vallabh Bansali’s Enam Securities Ltd putting in a bid for 22.75% $ 28.92 billion. Uday Kotak-controlled Kotak Securities bid for 12.30% at $15.64 billion.
ICICI Bank bid $3.78 billion for 2.97% of the shares, State Bank of India bid for 1.67% at $2.13 billion and Life Insurance Corporation of India bid $1.6 billion which works out to 1.25% of shares.
The demand from mutual funds stood at $2 billion. Sources said that mutual funds have applied for 18.68 crore shares worth Rs8,400 crore.
On Saturday, Ambani announced that the price has been fixed at Rs450 a share, the upper end of the band, raising Rs11,700 crore from the float.
The company had announced earlier that the retail investor would get a discount of Rs20 a share. The price for the retail investor would be Rs430.
According to a company release quoting provisional data from the stock exchanges, the issue got subscriptions from five million investors for over 1,662 crore shares, at the top end of the price band of Rs450 a share. “This translates into a commitment from investors for approximately Rs7,50,000 crore ($ 190 billion) ... the largest participation in any IPO in the history of the Indian capital markets,” the release said.
Other issues that saw comparable demand were Mundra Port & SEZ (Rs2,03,706 crore), Power Grid (Rs1,93,423 crore), Reliance Petroleum (Rs1,37,241 crore), Idea Cellular (Rs1,20,929 crore) and Power Finance Corporation (Rs76,530 crore). Together these five IPOs generated demand worth about Rs7,81,000 crore, as against about Rs7,50,000 crore in case of Reliance Power Ltd.