PowerGrid's follow-on issue subscribed fully - Attracts institutional investors

 

• The PowerGrid issue was fully subscribed on the first day of its follow-on offer, receiving bids worth more than Rs 8,000 crore. The issue, which opened for subscription on Tuesday, received bids for 90 crore shares against the 84 crore shares on offer. This is the first PSU follow-on offer that has seen such strong demand on the opening day itself. The FPOs of REC, NMDC, and NTPC barely saw any interest on their first day of offer and had managed to get fully subscribed due to institutional support. Retail portions for these issues did not get fully subscribed.

• In the case of the PowerGrid FPO, the institutional investor portion was subscribed 2.09 times, where 87.5 crore shares were bid for against the 41.9 crore shares on offer. FIIs bid for 30.8 crore shares and domestic institutions 56.7 crore shares. The retail portion received subscriptions for 6 per cent of the shares on offer. A total of 1.8 crore shares were bid against the 29.3 crore shares on offer. The high net worth investors' portion was subscribed 0.09 times.

• The issue will close for QIBs on November 11 and for other investors on November 12. The PSU is offering 84 crore shares through the issue and is planning on raising more than Rs 7,500 crore. The price band has been fixed at Rs 85-90 a share. The issues of NMDC and NTPC were also two issues in which the Government had experimented with the French auction method of pricing. Under this alternative book building model, institutional buyers would be free to bid above a certain floor price and the allotment would be on price-priority basis and at differential prices.

• During the time of these issues, the stock market too were rather flat unlike now when the stocks are trading near all-time highs, said market-men. The Engineers India issue on its first day was subscribed 0.01 times. But the issue was subscribed 13.36 times by the time it closed. The retail potion was subscribed 2.35 times. The shares of PowerGrid closed up 5.49 per cent on BSE on Tuesday at Rs 103.75 a piece touching a high of Rs 104.95 in intraday trade. The scrip had closed down more than 3 per cent at Rs 98.95 on Monday.

• Market-men said that Tuesday witnessed a jump in the scrip due to the good response seen in the FPO. "The euphoria after the success of the Coal India issue seems to have had a rub off effect on the PowerGrid FPO," said Mr Jagannadham Thunuguntla, Equity Head at SMC Capital. Coal India's Rs 15,000-crore issue was subscribed 15.2 times and fetched good demand from all categories of investors. The scrip listed at a premium of close to 40 per cent on Thursday. A lot of retail investors who bid for the Coal India issue said that they would be putting their money into the PowerGrid issue as well.