The initial public offer (IPO) of the state-run United Bank of India(UBI) today got a stupendous response with the issue getting subscribed nearly 33 times on back of a huge demand by retail investors, who had kept off the just-concluded follow-on offers from REC and NTPC.
The issue, which opened on February 23 and closed today, received total bids for over 164.59 crore shares against 5 crore shares on offer, thereby getting subscribed 32.92 times, according to the latest National Stock Exchange data.
The PSU lender aims to mop up Rs 330 crore through the IPO and has fixed a price band of Rs 60-66 a share. Calculated at the upper price band, the issue generated at demand worth Rs 10,862 crore.
"Banking IPOs are not that common here. So investors took this opportunity to subscribe to the issue. This shows that investors appetite is still there in the market and it all depends on the credentials of the company," SMC Capitals equity Head Jagannadham Thunuguntla said.
While qualified institutional buyers bid for 47.6 times the shares on offer, high networth individuals put up demand for 35 times, market sources said.
Significantly, unlike the NTPC and REC issues, which had very low retail participation, for the UBI issue, retail investors bid for nearly seven times the shares on offer.
"Retail investors followed suit of institutions and flocked to the issue as the valuation is right and at a discount of that of the peer group," Thunuguntla said.