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RITES IPO fully covered on second day; Fine Organics issue subscribed 40%
Photo Credit: Shah Junaid/VCCircle

The initial public offering of state-run railways consultant RITES Ltd was fully subscribed on the second day on Thursday, thanks mainly to retail investors, while the maiden share sale of Fine Organics Industries Ltd picked up pace after a slow start.

RITES received bids for 53.25 million shares at the end of the second day. That’s 2.11 times the 25.2 million shares on offer, stock-exchange data show.

The retail investors’ portion was covered 5.59 times while non-institutional investors bid for nearly 50% of the shares set aside for them. The institutional buyers’ quota was covered nearly 32%.

The public issue had received 60% bids at the end of day one on Wednesday.

RITES is seeking Rs 3,700 crore ($550 million) in valuation via the IPO, which closes on Friday.

RITES, which is wholly owned by the government, has set a price band of Rs 180-185 apiece, resulting in an IPO size of Rs 466.20 crore at the upper end of the range.

The public issue will result in 12.6% stake dilution by the government, which will get three years from the date of listing to bring its stake to 75% or below.

The share sale of RITES is part of the government’s disinvestment target for the current financial year.

Elara Capital, IDBI Capital Markets, IDFC Bank and SBI Capital Markets are managing the IPO.

Fine Organics

The speciality chemicals maker received bids for 2.11 million shares against the 5.36 million shares on offer, stock-exchange data showed. This means the book was covered 40% at the end of second day.

The portion reserved for institutional buyers was subscribed 64% while that for retail investors was covered 40%. Non-institutional investors’ portion was subscribed 4.4%.

The IPO was subscribed 12% at the end of day one.

Ahead of the IPO, the company raised Rs 180 crore by selling 2.3 million shares to anchor investors including Goldman Sachs, Kuwait Investment Authority and a bunch of mutual funds.

Fine Organics is seeking a valuation of as much as Rs 2,400 crore ($355 million). It has fixed the price band at Rs 780-783 a share. The issue closes on Friday.

The IPO seeks to raise as much as Rs 600 crore. The issue is entirely a secondary market sale by the promoters and other shareholders. It consists of 7.66 million shares, representing 25% of the post-issue equity capital.

Fine Organics, which makes ingredients for the petrochemicals and food industry, had filed its IPO proposal on 8 February. It received approval from the Securities and Exchange Board of India last month.

The firm is following in the footsteps of about four dozen listed peers, including Blackstone-backed SH Kelkar & Co. Ltd, BASF India and Shree Pushkar Chemicals & Fertilisers.

JM Financial and Edelweiss Financial Services are managing the IPO.

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