Slow start to Spice, Suryachakra IPOs

Investors shied away from the initial share offerings of Spice Telecom and Suryachakra Power Corporation, which opened for subscription today.

The Noida-based cellular operator Spice Telecom's initial public offering (IPO) of over 113 million equity shares received bids for just 0.19 per cent (over 2 lakh bids) for the total shares on offer. The shares are priced in a band of Rs 41-46 a share.

The issue will constitute 16.39 per cent of the fully diluted post-issue equity share capital of the company. The majority of the IPO proceeds will be used for the repayment of debt, payment of licence fees for national and international long distance communication segments and payment to vendors for network equipment.

For the six months ended December 2006, the company had posted a net loss of Rs 41.81 crore on net revenues of Rs 394 crore. The issue closes on June 27.

The second offering, Suryachakra Power Corporation, opened for subscription with 34 million equity shares and was subscribed 0.3 times with a total of 10.135 million bids on the first day, according to NSE data at 7 pm.

The qualified institutional buyers portion was subscribed 0.6001 times, while the retail portion was subscribed by a mere 0.0046 times.

The price band for the issue has been fixed between Rs 17-20 a share. The issue would constitute 44.37 per cent of the fully diluted post-issue paid-up capital of the company.

The proceeds from the issue will be used to set up two biomass power plants for its subsidiary in Parbhani and to meet the working capital requirement for power trading. The issue closes on June 29.