Fundmen bullish on IDFC issue

Driven by the positive sentiment surrounding infrastructure development in the country, domestic fund managers are upbeat on the forthcoming initial public offering (IPO) of Infrastructure Development Finance Co (IDFC). Most of the fund managers plan to subscribe to the offer.

Sandip Sabharwal, chief investment officer, Sahara Mutual Fund, said, "The offer looks good and the promoters are strong. We are positive towards it."

IDFC has fixed a price band of Rs 29-34 per share for the offer of 403.6 million shares.

Nilesh Shah of Prudential ICICI said, "It suits the investment portfolio of many of our funds. We would be subscribing to the offer."

Apart from partaking in the key infrastructure projects, the institution plans to have a key role in facilitating infrastructure development in the country through public-private partnership initiative.

Sunil Singhania of Reliance Capital Asset Management, said, "It is quite an OK issue. We would take it."

The proceeds of the IPO are to meet capital adequacy requirements and finance more projects in the country.

Kennath Andrade of Kotak Mutual Fund and Tridib Pathak of Cholamandalam AMC refused to comment on the issue as per policy decisions.

IDFC is a professionally managed company with the government of India and Industrial Development Bank of India (IDBI) as sponsors. The government has 35 per cent stake in the company and post-offer, this will come down to 23.29 per cent.

IDBI, which holds 4.99 per cent stake, will be left with 3.12 per cent stake after the issue. Other institutions which are significant stakeholders in IDFC include State Bank of India, ICICI, Indivest Pte Ltd, Asian Development Bank and International Finance Corporation.

Kotak Mahindra, DSP Merrill Lynch, SBI Capital Markets and JM Morgan Stanley are the lead managers to the issue.