RITES issue subscribed 67 times; strong response for Fine Organics IPO
Photo Credit: Shah Junaid/VCCircle

State-run railways consultant RITES Ltd received a massive response from investors on the final day of its initial public offering (IPO) on Friday, while the maiden public issue of speciality chemicals maker Fine Organics also closed on a high note.

RITES received bids for 1.68 billion shares at the end of third and final day. That's 66.85 times demand of the 25.2 million shares on offer, according to stock-exchange data.

The quota for institutional buyers quota was covered nearly 72 times. The retail investors’ portion was covered 14.56 times while non-institutional investors bid for nearly 195 times the shares set aside for them.

The public issue had received 60% bids at the end of day one on Wednesday.

It ended with 2.11 times subscription on the second day on Thursday.

RITES is seeking a valuation of Rs 3,700 crore ($550 million) via the IPO.

RITES, which is wholly-owned by the government, had set a price band of Rs 180-185 apiece, resulting in an IPO size of Rs 466.20 crore at the upper end of the range.

The public issue will result in 12.6% stake dilution by the government, which will get three years from the date of listing to bring its stake to 75% or below.

The share sale of RITES is part of the government’s disinvestment target for the current financial year.

Elara Capital, IDBI Capital Markets, IDFC Bank and SBI Capital Markets are managing the IPO.

Fine Organics

The speciality chemicals maker received bids for 47.28 million shares against the 5.36 million shares on offer, stock-exchange data showed. The book was subscribed 8.81 times the shares on offer.

The portion reserved for institutional buyers was subscribed 12.85 times while the quota for retail investors was covered 1.27 times. The non-institutional investors’ portion was subscribed 21 times after being on the sidelines for most of the bidding window.

The IPO was subscribed 12% at the end of day one. It ended with 40% bids on the second day on Thursday.

Ahead of the IPO, Fine Organics raised Rs 180 crore by selling 2.3 million shares to anchor investors including Goldman Sachs, Kuwait Investment Authority and a bunch of mutual funds.

Fine Organics is seeking a valuation of as much as Rs 2,400 crore ($355 million). It had fixed the price band at Rs 780-783 a share.

The IPO seeks to raise as much as Rs 600 crore. The issue is entirely a secondary market sale by the promoters and other shareholders. It consists of 7.66 million shares, representing 25% of the post-issue equity capital.

Fine Organics, which makes ingredients for the petrochemicals and food industry, had filed its IPO proposal on 8 February. It received approval from the Securities and Exchange Board of India last month.

The firm is following in the footsteps of about four dozen listed peers, including Blackstone-backed SH Kelkar & Co. Ltd, BASF India and Shree Pushkar Chemicals & Fertilisers.

JM Financial and Edelweiss Financial Services are managing the IPO.

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