After a shaky start, Mahindra Holidays & Resorts initial public offer (IPO) sailed through comfortably in the last day of the issue. The issue was subscribed 9.8 times. This makes it the best performing IPO (raising funds over Rs 100 crore plus) since the issue of state owned Rural Electrification Corp(REC) last year.

The Rs 1,639 crore REC issue was subscribed more than 27 times in February 2008, i.e., after the global market crashed in January'08. Although a couple of other issues had seen more than 10 times subscription they were much smaller IPOs.

Although most bids for Mahindra Holidays were at the lower end of the price band i.e., Rs 275, there were a reasonable number of applications at higher prices. What could have worked in the favour was the sharp 3% upward movement in the benchmark market indices Sensex and Nifty. This issue could set the pace for other IPOs which are lined up.

The latest segregated data on category wise applications shows institutional investors were the most active bidders having applied for 12.8 times the portion reserved for them. Non institutional (corporate and HNIs) bidders applied 11 times their allocation. Retail investors appeared to have joined the party at the last few hours and finally bid three times their reserved portion.

As against this on the penultimate day (Thursday), the issue was oversubscribed only by non retail investors. Non institutional investors (corporates and HNIs) made the maximum bids subscribing their portion of the issue 1.2 times as against 1.09 times that by institutional investors.

This sets the right conditions for Adani Power which has lined up a large issue of Rs 2,000 crore plus. The last day performance of Mahindra Holidays does augur well for firms with good management background to tap the market.

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