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Non-grading no constraint; investors lap up Mundra IPO

Non-grading no constraint; investors lap up Mundra IPO
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First Published: Fri, Nov 02 2007. 03 26 PM IST
Updated: Fri, Nov 02 2007. 03 26 PM IST
PTI
New Delhi: Investors are undeterred by the fact that the Initial Public Offering of Adani-group promoted Mundra Port and SEZ Ltd is “ungraded”, as the IPO got subscribed five-times on the second day of the issue.
According to the latest data available with stock exchanges, Mundra Port and Special Economic Zone Limited (MPSEZL) IPO has been subscribed 4.8 times on robust response from foreign and domestic institutional investors.
“We have not opted for the grading of this issue,” the company had said in its IPO prospectus filed with the Sebi.
Analysts believe the non-grading of the issue is not a concern for the investors who are seeing long-term prospects of the company.
MPSEZL is planning to raise up to Rs1,700 crore through its issue of 4.03 crore shares of Rs10 with a price band of Rs400-440.
However, some analysts believe that MPSEZL decision not to get its IPO graded is significant in the wake of companies raising much lesser amounts are preferring to get their issues graded by credit rating agencies as per the Sebi guidelines.
For instance, Religare Enterprises and Varun Industries have recently floated their IPOs after obtaining grades from Icra and Crisil, respectively, giving a fair idea about their issue to prospective investors.
Interestingly, Religare Enterprises issue, which closed yesterday (1 November), got susbscribed 160 times the size of the offer.
The ongoing issue of the MPSEZL, which would close on 7 November, seeks to raise money for setting up infrastructure at its Special Economic Zone at Mundra in Gujarat, terminal for coal and other cargo at Mundra Port and investment in sister companies.
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First Published: Fri, Nov 02 2007. 03 26 PM IST
More Topics: Mundra Port | IPO | SEZ | Religare | BSE |