FIIs commit $25 bn for RPL issue

Hedge funds apply for $10 bn via PNs.

Foreign institutional investors have committed $25 billion for the initial public offering of Reliance Petroleum Ltd (RPL), which closed on Thursday.

Investment banking sources said 20 FIIs put in applications worth $ 620 million each. Some other big institutions which put in bids lower than this amount include London-based Pictet ($ 500 million) and Merrill Lynch Offshore Fund.

Prudential Portfolio and Japan's Nomura committed $300 million each while the Royal family of Kuwait applied for shares worth $ 600 million.

The institutions had paid margin money of 10 per cent of their investment. But they will not be able to garner shares equivalent to their applications due to massive oversubscription.

It is also learnt that hedge funds applied for $10 billion for this issue through participatory notes. The last time funds applied through the PN route was at the time of the ONGC issue in 2004.

The QIB( qualified institutional bidder) portion was subscribed 68.2 times. High net worth individuals (HNI) applied for shares worth Rs 16,700 crore and they paid the full amount, as per Sebi rules.

RPL's issue, which is meant for part financing a refinery at the special economic zone at Jamnagar in Gujarat, attracted the highest retail applications. As many as 2.13 million lakh applications were submitted by retail investors. The top two issues in terms of retail applications so far were NTPC (1.422 million) and TCS (1.187 million) .

Merchant banking sources said the average application size by retail investors was Rs 59,500, more than double the previous record. Retail investors were permitted to apply for shares worth Rs 1 lakh, against the earlier practice of permitting them to apply for Rs 50,000.

The merchant bankers were forced to open the collection centres till 9 pm on the penultimate day of the issue due to the huge retail response.