Decent opening for DLF

78% of shares on offer get bids on first day of IPO.

Backed by big bids by foreign institutional investors, Delhi-headquartered DLF Ltd's mega initial share sale got off to a decent start, receiving bids for 78 per cent of the shares on offer on the opening day of the issue today.

Foreign investors bid for 120.01 million shares out of the 104.4 million shares reserved for qualified institutional buyers (QIBs), while domestic financial institutions submitted bids for 13.36 million shares. The QIB portion was subscribed 1.28 times.

But, the response from retail investors, who generally place bids on the last day of an application, was slow. The retail portion was subscribed by 0.0328 per cent. For the total of 52.2 million shares reserved for retail investors, the company received bids for 1.7 million shares on the opening day.

The first day's response from investors to the Rs 9,630 crore initial public offering (IPO), the biggest ever in India, has surprised many, given the divided verdict from brokerages on the share issue.

The company is raising Rs 8,750-9,625 crore through the IPO at a price band of Rs 500-500 per share.

"DLF is a big issue. Investors' response to the issue caught us by surprise. Subscription to most IPOs in the past has shot up on the last day," said Shailesh Kanani, an analyst with Angel Broking. "If that trend continues, DLF should be subscribed many times over," he said.

Meanwhile, the expected re-rating of the real-estate sector on account of the DLF issue resulted in a sharp spike in prices of other listed stocks, such as Unitech, Parsvanath, Sobha Developers and Indiabulls Real Estate, in morning trades. But, the shares came down in the latter half of trading on profit booking.

The share sale will give DLF a market value of as much as $24 billion, more than double that of Unitech, which is currently India's biggest property developer in terms of market valuation.