Ortel opens $40M IPO; Axis MF, ICICI Pru come in as anchor investors

Regional cable TV and broadband distribution firm Ortel Communications Ltd saw 15 per cent subscription of its initial public offer (IPO) on the first day with institutional investors leading the show.

As of the end of day 1, institutional buyers had covered a fifth of the issue reserved for them with retail investors applying for just around 3 per cent of their portion of the issue.

Earlier, the firm roped in Axis Mutual Fund and ICICI Prudential Insurance as anchor investors in the IPO. The two investors have picked 2.55 million shares for Rs 46.2 crore ($7.5 million).

While Axis Mutual Fund has picked 0.9 million shares for Rs 16.3 crore, ICICI Prudential Insurance brought in the remaining amount.

Meanwhile, the firm opened its IPO with a price band of Rs 181-200 a share, which would allow it to raise up to Rs 120 crore through fresh issue of shares besides an offer for sale by its existing investor, private equity firm New Silk Route (NSR), which would fetch it Rs 108.6-120 crore.

NSR, which was initially looking to part exit but had offered to sell its entire holding when Ortel filed its draft red herring prospectus (DRHP) last September, has now again changed its plan. It has now offered to sell around three-fourth of its holding as part of the offer for sale.

Ortel had previously looked at a public float around five years ago, when NSR was looking to exit completely. However, it did not go ahead with the IPO due to poor market conditions. In 2013 it had re-filed its documents but later withdrew it.

This is the first public issue to test the investor's appetite for primary market this year. At the fag-end of last year, edible oil firm NCML's issue was withdrawn after it failed to attract investors. Monte Carlo Fashions was the last one to clear the rope two months ago.

Kotak Mahindra Capital is managing the issue.

(Edited by Joby Puthuparampil Johnson)

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