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ICICI Securities IPO nears one-third mark on Day 1; Midhani issue covered 64%

22 March, 2018

The initial public offering of ICICI Securities Ltd neared one-third subscription on the first day of the issue on Thursday while the share sale of state-run Mishra Dhatu Nigam Ltd (Midhani) picked up pace on its second day.

ICICI Securities’ offering of 44.22 million shares, excluding the anchor allotment, was subscribed about 30% as it received bids for 13 million shares, stock-exchange data showed.

The portion reserved for institutional buyers was covered about 50%. The quota for high net-worth individuals and corporate bodies was subscribed 4%. The slot for retail investors, who cannot individually bid for shares exceeding Rs 2 lakh in value, was subscribed about 22%.

Ahead of the IPO, the stock broking arm of ICICI Bank Ltd had raised Rs 1,717 crore ($263 million) from anchor investors including Singapore state investor Temasek Holdings, Norway’s Government Pension Fund Global and an affiliate of billionaire investor Prem Watsa’s Fairfax Financial Holdings Ltd. The company allotted a tad more than 33 million shares at the upper end of the IPO price band of Rs 519-520 apiece.

Mumbai-based ICICI Securities is seeking a valuation of Rs 16,751 crore ($2.6 billion) through the IPO, as calculated at the top end of the price band. The public issue will close on Monday.

ICICI Bank aims to raise Rs 4,017 crore ($617 million) by selling a total of 77.25 million shares, or 24% stake. The lender will get three years from the date of listing to bring its stake down to 75% or below to meet the 25% minimum public holding norm.

The stock broking unit will become the fourth group company to float an IPO. ICICI Bank had gone public in 1998. Its arm, ICICI Prudential Life Insurance Co Ltd, went public in September 2016 through a Rs 6,056-crore offering. ICICI Lombard General Insurance Co Ltd went public in September 2017.

ICICI Securities had filed for the IPO on 15 December and received regulatory clearance on 2 February. The company will join listed peers Edelweiss Financial Services, Motilal Oswal Financial Services, IIFL Holdings Ltd and Emkay Global Financial Services Ltd.

ICICI Securities was incorporated in March 1995. It provides institutional and retail broking, merchant banking and advisory services. It also operates ICICIdirect.com, an online broking platform to invest in equity, derivatives, currency futures and mutual funds.

Midhani IPO
The IPO of alloy maker Midhani neared two-thirds subscription on the second day on Thursday. The issue, which did not have anchor investors, was subscribed 64% after receiving bids for 31.07 million shares compared with 48.71 million shares on offer, stock-exchange data showed.

The portion for institutional buyers was covered 1.09 times. The quota for high net-worth individuals and corporate bodies saw a handful of bids against the 7.02 million shares on offer for the category. The slot for retail investors was subscribed 31.48%.

The IPO was subscribed 26% on the first day on Wednesday.

The IPO, which closes on Friday, involves a sale of nearly 48.71 million shares, or a 26% stake, by the government in the company. If the government succeeds in selling the 26% stake, the company will have complied with the 25% minimum public holding norm for listed firms. The government aims to raise Rs 438.37 crore through the IPO.

Midhani joins state-run Bharat Dynamics Ltd and Hindustan Aeronautics Ltd in going to the market in recent weeks. The last two firms’ IPOs sailed through on the final day, with Life Insurance Corporation of India bailing out Hindustan Aeronautics’ issue.

The company had filed for the issue in January and got regulator nod a month later. Midhani is seeking a valuation of Rs 1,686 crore ($260 million) through the IPO at the upper end of the Rs 87-90 price band. Merchant bankers SBI Capital Markets and IDBI Capital are managing the offer.

The firm makes special steel and super alloys, besides being the only maker of titanium alloys in India. Its products have applications in defence, aerospace, power generation, nuclear and other general engineering industries.

Midhani reported a net profit of Rs 27.30 crore for the six months ended in September 2017 and revenue from operations of Rs 208.06 crore. As on 31 January 2018, the company had an order book of Rs 517 crore.

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ICICI Securities IPO nears one-third mark on Day 1; Midhani issue covered 64%

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