The Rs.4,500 crore initial public offer (IPO) of Bharti Infratel Ltd, the country’s first telecom tower firm to go public, has received demand for 1.3 times the shares on offer. The IPO closed on Friday.
India’s largest telecom operator Bharti Airtel Ltd owns around 86% of the firm that offered 188.9 million shares for sale in a price band of Rs.210-240 apiece.
Earlier this week, the IPO of rating agency Credit Analysis and Research Ltd (CARE) was subscribed nearly 41 times while that of PC Jeweler Ltd was subscribed 6.9 times. The government’s divestment programme, too, got a boost with state-run miner NMDC Ltd’s follow-on public offer being subscribed 1.7 times.
Market experts are skeptical if the trend augurs well for forthcoming IPOs. Fund tracker Prime Database Ltd, retailer V-Mart Retail and local search-engine operator JustDial Ltd are some firms that have filed draft offer documents with the market regulator.
“If you have priced your offering in an attractive manner and if you have a strong business model, there is no dearth of investments,” said Daljeet Kohli, head of research at IndiaNivesh Securities Pvt. Ltd.
While institutional interest in the offers was high, the response of retail investors has been moderate. According to data on Thursday (the latest data available), Bharti Infratel saw only 0.06% of its shares reserved for retail investors being subscribed. While CARE’s IPO saw the reserved portion for qualified institutional buyers (QIBs) subscribed nearly 46 times, its retail portion was filled in 6.2 times. “Only quality issues will go through. We can see that investors are cautious and are careful about their choices,” said Kohli.
On Friday, the Bharti Airtel stock closed 1.52% down on BSE at Rs.311.95 while the benchmark Sensex gained 0.46% at 19,317.25 points.
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