Mumbai: The initial public offering (IPO) of state-run hydroelectric power producer SJVN Ltd was subscribed more than 6.61 times at close on Monday.
The issue, the first of the government’s disinvestment programme this fiscal year, received bids for at least 2.74 billion shares against the 415 million offered, with the qualified institutional buyer (QIB) portion subscribed nine times over.
The government is divesting a 10% stake from its 74.5% holding in SJVN, a joint venture between the Union government and the Himachal Pradesh government, which holds the remaining equity.
The IPO, which opened 29 April with a price band of Rs23-26 a share, was the first to offer retail investors a 5% discount on the cut-off price set for institutional investors.
An official familiar with the development said the retail book constituting 123.4 million shares was subscribed over 2.6 times, and is expected to go up to three times after final counting.
The high networth individual (HNI) portion was subscribed 7.2 times.
“A majority of the bids were received at the upper end of the price band—Rs26 a share,” said the official, who declined to be named.
Until 30 April, the QIB portion was subscribed 1.34 times, but the issue was oversubscribed on the last day as at least 90 institutional investors, both domestic and foreign, bought shares.
“There were at least 10 FIIs (foreign institutional investors) who placed their bids for SJVN,” the official said, adding that among institutional buyers Life Insurance Corp. of India (LIC) placed bids for the most shares. State Bank of India, Punjab National Bank, HSBC and ICICI Bank Ltd were some of the major domestic institutional bidders. Among FIIs, Nomura, Morgan Stanley, Credit Suisse and Deutsche Bank were big buyers.
The government could raise up to Rs1,079 crore at the upper end of the price band, though the cut-off price is yet to be decided. The subscription numbers are the best in the recent past for a state-owned firm.
JM Financial Consultants, IDFC Capital Ltd, IDBI Capital Market Services Ltd and SBI Capital Markets Ltd are the book running lead managers.