LIC Housing raises $30 m via maiden GDR float

LIC Housing Finance Ltd has raised about $29.85 million through its maiden global depository receipt (GDR).

The issue, which opened for subscription on August 27 and closed on 29, has been oversubscribed about 1.5 times, and has been priced at $5.97 per GDR, translating into Rs 138.36 per share.

The issue represents 11.77 per cent of the equity capital of LIC Housing Finance. Post offering, foreign institutional holding will rise above 25 per cent.

The GDR pricing is at 1.5 per cent premium to the average closing price of the company's domestic shares, one week prior to the launch date. The proceeds of the 50-lakh GDR issue will help reduce costs of funds and will be deployed in housing finance activity.

The issue was lead managed by Kotak Investment Bank and Credit Lyonnais Securities Asia Ltd (CLSA). The GDR will be listed on the Luxembourg Stock Exchange.

"This (GDR) step marks a beginning in the company's GDS," said A K Dasgupta, CEO & director, LIC Housing Finance. Following the issue, the Life Insurance Corporation of India's (LIC) stake in the housing finance arm will fall by about 5 per cent from its existing 38.5 per cent.

The share price of the housing finance arm today surged by 2 per cent to close the day at Rs 148.5 on the Bombay Stock Exchange, after touching a high of Rs 150.85 on the bourses.

The issue received immense response from institutional investors and was over-subscribed, said Richard Taylor, head investment banking, Asia-Pacific Markets, CLSA.

LIC Housing has been attracting a lot of interest from foreign institutional investors, especially foreign mutual funds such as Templeton and Merrill Lynch. FII holding as on March 2004 had crossed 20 per cent.