Standard Chartered Plc’s offering of Indian Depository Receipts (IDRs) saw institutional investors pouring in large numbers on the final day of the bidding on Friday.
According to the National Stock Exchange (NSE), the issue was subscribed 2.20 times until 6 pm, with both institutional and high net worth segments getting oversubscribed. The IDRs would be listed on the bourses on June 11.
According to the NSE data, bids were received for 449.06 million IDRs, as against 240 million IDRs on offer in the price band of Rs 100-115. The portion reserved for qualified institutional buyers (QIBs) is said to have been subscribed around four times, while that for high net worth individuals has been subscribed around two times. Market sources said the retail portion had been subscribed 25 per cent.
The precise category-wise bidding details were not available at the time of going to press. Meanwhile, of the total bids received under the QIB portion, a little over 70 per cent came from foreign institutional investors (FIIs) and the rest from domestic mutual funds, banks and other financial institutions. Senior bank officials said blue-chip mutual funds showed keen interest along with big private and public sector banks.
“We are very happy with the subscription levels,” said Rajagopal A, managing director & head of global capital markets, UBS Securities India. “It proves there is enough appetite for Indian Depository Receipts among all classes of investors. We saw most of the bids on the last day, which could become the norm,” said Rajagopal. UBS is one of the investment bankers managing the issue.
Market sources said domestic institutional investors, including ICICI Prudential Mutual Fund, HDFC Bank, UTI Mutual Fund and State Bank of India, put in sizeable bids. The foreign bank has already raised around Rs 374 crore by roping in six anchor investors that subscribed to 36 million IDRs, or 15 per cent of the issue size.
The bidding was in line with market expectations that FIIs would bid only on the last day. This is because according to the new norms for initial public offers, institutional investors have to pay the full amount at the time of applying. Earlier, they had to pay only 10 per cent and the balance on allotment.
The first two days of bidding did not see a single bid from FIIs as they didn’t want to block money for two additional days. As the allotment will be done on a proportionate basis, it does not make any difference whether the bid is submitted on the first day or the last day of the bidding period. The issue was the first one to test the waters under the new norms.
