The initial public offering of state-run Rail Vikas Nigam Ltd has neared the one-fifth mark after two days of bidding.
The offering of 253.46 million shares was subscribed 18% after receiving bids for 44.87 million shares, stock-exchange data showed. The IPO will close on April 3.
Retail investors led the bidding as the portion of shares reserved for them was almost half covered. The quota set aside for Rail Vikas employees was subscribed about 48%.
Institutional buyers didn't make any bid while non-institutional investors such as corporate houses and affluent individuals placed orders for 3% of the shares reserved for them.
The IPO of Rail Vikas, which was covered 9% on the first day on Friday , 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.