Angel Broking Ltd’s initial public offering was subscribed almost four times on the final day of bidding Thursday thanks to demand from retail and institutional investors, but the issue failed to attract wealthy individuals.
The public offering of 13.77 million shares, excluding the anchor allotment, received bids for more than 54.26 million shares, stock-exchange data showed at the end of bidding.
The quota of shares reserved for retail investors was covered 4.3 times. Institutional investors bid for 5.7 times the portion set aside for them, the data showed.
Non-institutional investors, which include corporate houses and high-net-worth individuals, placed orders for less than 70% of the shares reserved for them.
Angel Broking’s IPO is in sharp contrast to other recent share sales. For instance, the IPO of Warburg Pincus-backed Computer Age Management Services Ltd was covered almost 47 times while the share sale of Chemcon Speciality Chemicals Ltd got demand for nearly 150 times the issue size.
Angel Broking is seeking a valuation of Rs 2,500 crore ($340 million) in the IPO at the upper end of the price band of Rs 305-306 per share.
The IPO comprises a fresh issue of shares worth Rs 300 crore and a secondary market sale of nearly 9.81 million shares for up to Rs 300 crore. The offer will result in roughly 24% stake dilution on a post-issue basis.
Promoters Ashok D. Thakkar and Sunita Magnani are selling a portion of their holding. Some individual shareholders, including members of the Thakkar family, as well as International Finance Corporation (IFC) are also selling shares.
IFC is selling about 3.92 million shares out of 12.927 million shares (17.95% stake pre-IPO) for Rs 120 crore. Its post-IPO holding will be about 9 million shares (11.01% stake) after factoring the fresh issue of shares in the IPO.
IFC had picked up a 12.5% stake in Angel Broking in 2007 for Rs 150 crore. The deal valued Angel Broking at Rs 1,200 crore then. IFC’s stake increased to 17.95% stake after a bonus issue in March 2018.