Indiabulls Power IPO subscribed 9 times on second day

Indiabulls Power IPO subscribed 9 times on second day Mumbai: The Rs 1,700-crore initial public offer of Indiabulls Power, got subscribed nearly nine times the on the second day of issue on Wednesday.

The issue received bids for over 246.82 crore shares, compared with 27.86 crore shares on offer, thereby garnering demand of 8.86 times according to the data on the National Stock Exchange.

Pricing the shares in a range of Rs 40-45 the company plans to mop up the amount from the primary market at the upper end of the issue price.

Qualified institutional investors flocked the issue and bid for over 16 times the shares on offer. High networth individuals and retail investors subscribed to nearly three times and 0.52 times the shares reserved for them, as per NSE data.

"Currently Indiabulls Power has no operational power plant. Its first power plant is expected to be operational only by February 2012. All its future earnings are highly sensitive to its ability to complete projects on time with all the procurements in place," brokerage firm Sharekhan said.

The power unit of Indiabulls Realestate has come out with an IPO of 39.07 crore equity shares which would result in a equity dilution of 19.06 per cent.

Post the issue, the shareholding of promoter group would come down to 59.18 per cent from the current 71.43 per cent.

The initial share sale of Indiabulls Power has attracted five anchor investors who subscribed to 18 per cent of the issue. The company raised over Rs 316.46 crore from these strategic investors.

The existing shareholders in the company include LNM India Internet Centures and FIM which holds 10.71 per cent and 17.86 per cent in the company. The issue would also dilute the holding of NRI billionaire LN Mittal to 8.67 per cent.

Proceeds of the IPO would be utilised to part-finance the construction and development of the 1,320-MW Amravati Power Project Phase-I and the 1,335- MW Nashik Power Project, apart from general corporate purposes.

Bureau Report