Mumbai: The follow-on public offering (FPO) of state-owned NMDC Ltd picked up momentum on its second day amid widespread criticism of the issue being overpriced. The FPO, which will close on Friday, was 79% subscribed on Thursday. NMDC is selling nearly 332.2 million shares and will increase public shareholding to 10% from the current 1.62%. It is the third public sector company to float a share sale process under the government’s divestment road map. “The issue aims to raise nearly Rs11,600 crore. It is a large issue and so far the issue has done well," said an official at one of the investment banks that is handling the issue.

Graphic: Yogesh Kumar / Mint

“We should not expect such a huge issue to get subscribed 30-40 times," the official said.

According to data available on the stock exchanges, the issue received bids for nearly 260.9 million shares at the end of the second day of the offer, with most bids coming at Rs300, the lower end of the price band . The portion for qualified institutional buyers was subscribed 1.56 times, while only 2.85% of the retail portion was subscribed.

On Wednesday, when the issue opened in a price band of Rs300-Rs350, the company received barely 17% subscriptions and many market watchers termed the issue as unrealistically priced.

Shares of NMDC fell 5.13% on Thursday to close at Rs360.35.