MOIL issue garners robust response

Boosts Centre's divestment plan

BY Siddharth Kumar
Delhi

The initial public offering (IPO) of the state-run MOIL (former Manganese Ore India Ltd) received robust response from investors, institutional as well as retail, and was 54 times oversubscribed at close on Wednesday.

Market analysts believe the strong response to the Nagpur-based manganese ore miner will act as a booster to the Centre, which aims to garner Rs 40,000 crore by cutting its stakes in public sector undertakings this financial year..

The Rs 1,200-crore issue, which opened on November 26, was subscribed more than 26 times in the portion reserved for retail buyers. The increased retail limit of Rs 2 lakh against the earlier 1 lakh also helped the issue to bring higher subscription levels in retail portion, added analysts. In the non-institutional category, the IPO received bids for 143 times more than on offer for them.

“The response to the issue is mindboggling,” said Arun Kejriwal, founder of the Mumbai-based advisory firm Kejriwal Research and Investment Services.

Moreover, in the portion reserved exclusively for qualified institutional buyers (QIBs), which includes foreign institutional investors, mutual funds and insurance firms, the offer was subscribed more than 49 times the portion on offer for them, according to data on the National Stock Exchange (NSE) website. Bidding for QIBs closed on November 30 and December 1 was the last date for retail investors.

The issue, priced in a range of Rs 340 to Rs 375 per share, would see divestment of a 10 per cent stake by the Centre and 5 per cent each by the state governments of Maharashtra and Madhya Pradesh.

The recently share sales by Coal India Ltd (CIL) and Power Grid Corporation of India Ltd also attracted excellent support. “Clearly, these numbers would bolster the government's divestment programme,” added Kejriwal. Meanwhile, the follow-on public offering of the Shipping Corporation of India (SCI) was subscribed 44 per cent by the end of the second day on Wednesday. The offer, in the range of Rs 135 and Rs 140 per share, closes on December 3.

In secondary market also, the shares of SCI moved up and ended at Rs 144.10 each, higher by 0.31 per cent, on the NSE.

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