The initial share-sale offer of Indiabulls Power, a utility partly owned by billionaire Lakshmi Mittal, received bids for over eight times the shares on offer on the second day of the IPO today.
The issue received bids for over 236.64 crore shares till 1400 hrs today, compared with 27.86 crore shares on offer, thereby, garnering demand of 8.49 times according to the data on the National Stock Exchange.
The shares are being offered in a range of Rs 40-45 a piece and the company plans to mop up Rs 1,700 crore from the primary market at the upper end of the range.
The issue has gathered good demand from retail investors on the first day, although marketmen are of the view that the returns on the investment would accrue only after 3-4 years.
"Currently Indiabulls Power has no operational power plant. Its first power plant is expected to be operational only by February 2012. All its future earnings are highly sensitive to its ability to complete projects on time with all the procurements in place," brokerage firm Sharekhan said.
The share sale has attracted five anchor investors who subscribed to 18 per cent of the issue. The company raised over Rs 316.46 crore from these strategic investors.
The proceeds of the IPO would be utilised to part-finance the construction and development of the 1,320-MW Amravati Power Project Phase-I and the 1,335-MW Nashik Power Project, apart from general corporate purposes.