GBN issue subscribed nearly 42 times

The initial public offering (IPO) of Global Broadcast News (GBN), which owns and operates CNN-IBN, the 24-hour English news channel, was subscribed about 42 times, even as the company decided not to accept applications by foreign investors for its maiden float.

The decision to ignore applications by FIIs is construed as a strategy to lure them into buying in big numbers at the time of listing.

Further, the foreign direct investment (FDI) limit in media is 26 per cent, and purchase of shares through the IPO is considered as FDI.

"If FIIs are allowed entry through IPO, it leaves little room for the company to induct a foreign partner at a later date," point out analysts.

The retail portion of the IPO, which had a price band of Rs 230-250 per share, was subscribed 34 times, the qualified institutional buyers (QIB) segment was subscribed 37 times and the high networth investor segment was subscribed 109 times, as per the information available at 7 pm.

The Rs 105-crore issue is mostly aimed to fund its expansion plans, including completion of the acquisition of IBN-7 - the Hindi news channel of the group that earlier belonged to the Jagaran group.

According to estimates, the company will offer 4.2 million equity shares if the price fixed at lower side (Rs 230) or 4.6 million equity shares if it is at the higher side (Rs 250).

Kotak Mahindra and ICICI Securities are the book running lead managers while JM Morgan and IL&FS are co-book running lead managers to the issue.