IPCL oversold twice on first day of issue

The IPCL public offer was subscribed almost two times on day one of the bidding process.

Investors put in bids for 110.7 million shares as against the 59.4 million shares on offer, with most of the bids close to the floor price of Rs 170 fixed by the government.

The IPCL stock gained 0.69 per cent to Rs 196.30 on the Bombay Stock Exchange yesterday with a combined traded volume of around 4.8 million shares on the BSE and NSE.

According to the information posted on the National Stock Exchange website, the highest bids were at Rs 210 per share.

The IPCL issue opened yesterday, and is the first of the public offerings from six PSUs. The government is selling its 34 per cent stake in IPCL.

Retail investors have been offered a 5 per cent discount on the cut-off price discovered through a book-building process.

Market analyst Ashok Kumar, CEO of Lotus Strategic Consultants, said, "Most of the bids could have come from institutional investors, who, as per the issue guidelines, do not have to make any upfront monetary commitment."

The issue would remain open till February 27 after which the government would finalise the offer price. Another 5 per cent has been offered to strategic partner Reliance Industries at Rs 195 per share.

IPCL employees have also been offered another 5 per cent from the government's current holdings.

The government currently holds a 34 per cent stake in the petrochemicals giant after offloading a 26 per cent stake, along with management control, to the Reliance group in 2002.

The opening show

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• Most of the bids were close to the floor price of Rs 170 per share
• The highest bids were at Rs 210 per share
• The IPCL scrip gained 0.69 per cent to close at Rs 196.30 on the BSE on Friday
• The government will finalise the offer price after the issue closes on February 27