Financial Daily from THE HINDU group of publications
Thursday, Jun 06, 2002
Corporate - IPOs
`i-flex offer price, a result of combination of factors'
KOLKATA, June 5
FOR starters, it is the company's maiden public issue being made through the 100 per cent book-building process where the floor price of equity shares of the face value of Rs 5 each has been fixed at Rs 530 per share.
This despite the fact that barely three months ago, i-flex solutions made a preferential allotment of two per cent of the company's equity shares at an issue price of Rs 650 per share.
On March 4, a total of 6,79,000 equity shares of i-flex solutions, having a face value of Rs 5 each, was allotted on a preferential basis to Financial Ventures Mauritius Ltd, a member of the Standard Chartered Group of Companies, at an issue price of Rs 650 per share.
When asked why a lower price of Rs 530 per equity share has been pegged in the present share issue through the 100 per cent book-building route when the company has successfully placed its shares at a higher price of Rs 650 per share only three months ago, Mr N.R.K. Raman, Senior Vice-President (Global Sales) of i-flex solutions, said a combination of factors had prompted the company, its advisors and lead managers to the issue to fix the floor price now at Rs 530 per share.
Speaking at a news conference held here today, Mr Raman said the floor price of Rs 530 was "attractive'' for investors who wish to be part of the company's future. Share prices on the bourses, too, have taken a beating between March and now and, hence, it was necessary to keep the floor price of the shares on offer at levels that were lower than what they fetched earlier.
According to Mr Vikas Khattar, Assistant Vice-President of DSP Merrill Lynch Ltd, one of the co-book running lead managers to the issue, the floor price of Rs 530 per share was meant to make the scrip "attractive to investors and enable them to take a call on the company and learn more about it''.
While Mr Khattar did agree that the dampened scenario in the stock exchanges across the country and fears of Indo-Pak war had a bearing on the decision on the floor price, he disagreed with suggestions to the effect that the value of the company's shares in the perception of its existing promoters had declined from its March levels.
According to him, the company was confident of attracting investor interest at the floor price that has been fixed.
i-flex solutions' initial public offering through the 100 per cent book-building process comprises 39,61,700 equity shares - including a fresh issue of 33,60,000 equity shares - of the face value of Rs 5 each at a floor price of Rs 530 per share. The offer, which opened for subscription today, closes on June 11.
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