The initial public offer (IPO) of L&T Finance Holdings was subscribed more than five times by the deadline of 6 pm on Friday for the Rs 1,245-crore issue. Bids came for a little over a billion shares, as against 214.51 million on offer.
According to data on the stock exchanges, the IPO was subscribed 5.19 times, with all segments also getting fully subscribed. Bids for 1,112.6 million shares were received. These were priced in a band of Rs 51 to Rs 59.
The segment reserved for qualified institutional buyers was subscribed 1.92 times until 6 pm. The portions reserved for high net worth individuals and retail investors was subscribed 6.19 times and 9.34 times, respectively.
L&T Finance Holdings has already raised around Rs 153 crore by placing shares with anchor investors. The placement has been done at Rs 56 per share, even as the price band for the initial public offer (IPO) has been fixed between Rs 51 and Rs 59. The anchor investors include Tioman Investments (Khazanah) of Malaysia (Rs 88.8 crore), DSP BlackRock (Rs 38.9 crore) and Capital International (Rs 25 crore).
The company filed its prospectus with the market regulator in September 2010 and got the approvals on December 1. However, choppy equity markets and lack of investor interest had led to the postponement. It managed to rope a pre-IPO investment of Rs 330 crore from two Mauritius-based entities, MACE CIPEF and MACE CGPE, at Rs 55 a share.
According to the prospectus, the proceeds are to be used for meeting growing business needs and capital adequacy requirements of the two subsidiaries, L&T Finance and L&T Infrastructure.
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While Rs 345 crore will be infused into L&T Finance, Rs 515 crore will be allocated to L&T Infrastructure. The balance will be used for repayment of inter-corporate deposits by the promoters and for general purposes.
L&T Finance’s share sale, where it is likely to dilute close to 17 per cent of its post-issue equity, is the largest such transaction this year. In the first seven months of the current calendar year, 21 new companies have raised Rs 3,356 crore, with the average being a paltry Rs 160 crore per issue. Muthoot Finance, the largest IPO to hit the market this year, raising Rs 900 crore, has disappointed and is barely hovering around its issue price of Rs 175.