The initial public offering of state-run Rail Vikas Nigam Ltd crossed the ropes on the fourth and final day of the issue, helped by bidding from institutional investors.
The offering of 253.46 million shares was covered 1.83 times after receiving bids for 463.3 million shares by the end of the day, stock-exchange data showed on Wednesday.
The retail investors’ portion was covered three times while the quota set aside for Rail Vikas employees was subscribed twice.
The portion reserved for qualified institutional buyers, which include foreign institutional investors, was covered 1.36 times.
Non-institutional investors such as corporate houses and affluent individuals placed orders for more than 80% of the shares reserved for them.
The IPO is part of the government's disinvestment programme. It comprises only a share sale by the government and the company is not raising any fresh capital.
The government has set a price band of Rs 17-19 apiece. Retail investors will get a discount of Rs 0.50 on the price at which the shares are allotted.
The company, which was created in 2003 for rail project development and mobilising financial resources, is seeking as much as Rs 3,950 crore (about $574 million) in valuation from the IPO.
At the upper end of the price band, the government will raise Rs 481 crore ($70 million) after it increased the issue size from 209.15 million shares it had proposed to sell at the time of filing the IPO draft prospectus. In other words, the government is now offloading a 12.16% stake compared with 10% proposed earlier.
After the IPO, the government’s holding will drop to 87.84% from 99.99%. Rail Vikas will get three years from the listing date to bring down the government's holding to 75% or below, as per the minimum public shareholding norms for listed companies.
The company had filed its draft prospectus in March last year and received regulatory approval to float an IPO two months later.
Yes Securities (India), Elara Capital (India) and IDBI Capital Markets & Securities are the merchant bankers for the IPO.