Mahindra Holidays & Resorts India is the first large company to float its IPO this year in what could be a signal that the worst is over for the primary market. The subsidiary of auto maker Mahindra & Mahindra, is opening its IPO on June 23, before the much awaited issues of OIL and NHPC hits the market.
It had filed a prospectus with Sebi for the IPO in September 2008. It would be interesting to see the pricing of the issue. Since the time it filed the draft prospectus, the Indian markets have crashed and bounced back.
The hospitality firm that owns Club Mahindra Holidays resorts sold 2.1% stake to SBI and 1% stake to Jacob Ballas in a pre-IPO placement at Rs 478/share in January 2008. It raised Rs 120 crore through the transaction which valued the company around Rs 4,000 crore.
The terms of the issue which included fresh issue of 5.8 million shares and offer for sale of 3.3 million shares by M&M, remains unchanged. The issue will represent 11% of the post-issue paid up capital. Kotak is the global co-ordinator and the book running lead manager (BRLM) while HSBC is the BRLM for the issue.
At the earlier valuation of around Rs 4,000 crore, M&M could pocket close to Rs 157 crore out of the public float. Not surprisingly, M&M scrip has been shooting up over the last few weeks.
Although, another large IPO is slotted from Adani Power but there are no dates for the issue. Adani Power has filed a fresh prospectus with Sebi for the issue in April 2009.
The bounce back in the secondary market has perked by fund raising plans of already listed companies. Many firms have announced or already raised a large sum through qualified institutional placements(QIP).
But the IPO market is yet to see any surge in activity. The two issues lined up from the PSU pack- OIL and NHPC were supposed to be the indicator of investor appetite for fresh issues. To that extent, the Mahindra Holidays issues comes as a surprise.
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