Indian Energy Exchange (IEX), which counts private equity firm Multiples Alternate Asset Management Pvt. Ltd besides a bunch of other investment firms as backers, saw a slow start to its public issue on the first day on Monday.
Retail investor led the subscription on day one besides as handful of bids from institutional as well high-net-worth individuals.
The public offering of 4.24 million shares, excluding the anchor allotment, received bids for 6.53 lakh shares, stock exchange data showed. The book was subscribed 15.3%.
The portion set aside for qualified institutional buyers (QIBs) received bids for 1% of the 1.21 million shares on offer.
Retail investors’ category, in which per application value cannot exceed Rs 2 lakh, was subscribed nearly 30% of the 2.12 million shares on offer.
The portion set aside for non-institutional investors such as corporate houses and wealthy individuals was subscribed 1.2%.
IEX, India’s first exchange for trading in electricity and renewable energy certificates, raised Rs 300.21 crore from a bunch of anchor investors including the fund of one of the world’s oldest and largest investment firms Capital Group, Eastspring Investments, Nomura Ireland and UK’s National Westminster Bank as a depository of Baillie Gifford.
The company allotted 1.81 million shares at the upper end of the 1,645-1,650 per share price band, stock exchange data showed.
IEX is seeking a valuation of Rs 5,003.63 crore ($741 million) through the IPO that will see a 20% stake dilution. The IPO will close on 11 October.
The offering comprises a sale of 6.06 million shares by shareholders and the company itself is not raising any capital. The selling shareholders will raise Rs 1,001 crore ($153 million) at the upper end of the price band.
Axis Capital, Kotak Investment Banking and IIFL Holdings are the merchant bankers managing IEX’s IPO.
IEX was founded in 2008 as India’s first electricity exchange for state utilities, industrial consumers, power generators and traders. It was previously an affiliate of the Jignesh Shah-promoted Financial Technologies (India) Ltd. FTIL owned 26% of IEX, but sold its stake in the aftermath of a payment fraud at subsidiary National Spot Exchange Ltd.
The company will join a clutch of exchanges and financial market infrastructure companies that have either gone public over the years or have been planning to do so.
Multi Commodity Exchange of India Ltd (MCX) became the first exchange in India to go public after listing its shares five-and-a-half years ago.
BSE Ltd became the second bourse to go public, in February this year. BSE’s larger rival and India’s largest stock exchange, National Stock Exchange (NSE), is also working towards a listing and aims to go public next year.
Central Depository Services Ltd (CDSL), which counts BSE as its promoter entity, went public three months ago and gained 75% on its listing day, touching a market value of about Rs 2,700 crore. This has now risen to almost Rs 3,581 crore.
IEX is seeking a valuation of Rs 5,004 crore through the IPO, which will result in a 20% stake dilution. This is far higher than the Rs 2,600-crore valuation at which PTC India Financial Services Ltd sold a 5% stake in IEX in March.
The company’s valuation has been consistently rising, and many of its previous investors have also made handsome gains.
In December 2016, Anil Ambani-controlled Reliance Infrastructure sold its entire stake in IEX, earning multi-fold returns on its nine-year-old bet. Reliance Infrastructure had invested Rs 1.25 crore in October 2007 and sold its 4.122% stake for Rs 103 crore. This deal valued IEX at Rs 2,500 crore.
Global multi-stage investment firm Bessemer Venture Partners (BVP), which had invested in IEX in 2010, had sold a 4% stake in 2015 to TVS Capital for around Rs 80-90 crore. In May 2016, BVP sold the balance 6% stake to Dalmia Group for around Rs 130-150 crore, as per VCCircle estimates.
Earlier, Jindal Steel & Power Ltd had sold a 4.12% stake in IEX to Motilal Oswal PE in March 2016.