Adani Power has become the first company to see full subscription of its initial public offer on day one this year. The largest public issue in 18 months (second only to Reliance Power’s $2 billion issue in early 2008) was oversubscribed close to three times on the first day of the IPO, pointing towards the investors appetite.
Gujarat-based company which is backed by private equity investor 3i is looking to raise anywhere between Rs 2,700-3,000 crore through the public float. The issue is priced in the bracket of Rs 90-100/share as against the average cost of shares for 3i estimated at Rs 61/share.
DSP Merrill Lynch Ltd is the global co-ordinator and book running lead manager(BRLM) while Enam Securities, IDFC – SSKI, JM Financial, Kotak Mahindra Capital, Morgan Stanley India, ICICI Securities and SBI Capital are the other BRLMs.
On the first day, the issue saw lot of interest from institutional investors and the qualified institutional buyer(QIB) portion of the issue was oversubscribed more than six times while non institutional-non retail investors(corporates and high networth individuals) bid for more than two times the number of shares reserved for them.
Retail investors however are yet to participate in a big way in the issue bidding for just 5% of the total shares allocated for them on day 1. The shares reserved for employees of the company also did not see any application on the first day.
The issue was also the first public offering which allotted shares to a group of anchor investors after market regulator Sebi institutionalised the concept early this year.
Anchor investors were allotted 52.8 million shares(out of total 301.6 million shares on issue) at Rs 95 per share. The group of anchor investors include T Rowe Price, Sundaram BNP Paribas Mutual Fund, Credit Suisse, CLSA, AIC Advantage Fund and Ecofin along with one or more of their investor arms.