Mumbai: An initial public offering (IPO) by private-sector road builder Jaypee Infratech to raise up to $530 million was fully covered by late afternoon on the final day, with institutional investors so far making up for the lack of retail demand.
The share offer was covered 1.44 times by 3.30 pm (1000 GMT) on Tuesday, with most of the bids at the lower end of the Rs102-Rs117 price band, National Stock Exchange data showed.
The institutional portion, which accounts for 60% of the issue, was more than twice covered, sources with direct knowledge of the issue told Reuters. Major bidders included state firms and insurance companies.
The $240 million SJVN IPO, the first share sale by the government in this financial year, was covered 6.6 times by close on Monday, with institutions bidding almost nine times their allotment and retail investors bidding three times their share.
A $2.2 billion follow-on share sale in state-run miner NMDC in March was also covered on the last day of the offer, helped by state-run investors with most bids at the bottom of the price range.
The Jaypee offer comprises fresh issue of shares to raise Rs1.65 crores, as well as sale of 60 million shares by parent construction firm Jaiprakash Associates, which currently has a 99% holding in the unit.
Retail investors will be offered a 5% discount to the final offer price.
Jaypee is developing the 165-kilometre, six-lane Yamuna Expressway in the northern state of Uttar Pradesh at a cost of $2 billion.
The expressway will connect Noida, near Delhi, with the city of Agra, where the Taj Mahal is located. The company plans to develop real estate of about 25 million square metres along the expressway.
Morgan Stanley, Bank of America Merrill Lynch, Axis Bank, Enam Securities, IDFC Capital, ICICI Securities, JM Financial, Kotak Mahindra Capital and SBI Capital Markets are managing the issue.