The Hindu Business Line : Emaar MGF too withdraws IPO; co says decision will help in the long run

Close on the heels of Wockhardt Hospitals withdrawing its IPO yesterday for lack of adequate response, Emaar MGF Land on Thursday followed suit, citing adverse market conditions.

Stock exchange data showed the Emaar MGF IPO was subscribed 0.39 times. “This decision to withdraw would help us in the long run,” said Mr Shravan Gupta, Executive Vice-Chairman and Managing Director, Emaar MGF Land.

“Rather than going ahead with an IPO at this stage with an uncertain post-listing scenario, we do not want investors to lose their money in the short term because of the prevailing market conditions.”

Revisit in 12-18 months

On the possible timeframe for revisiting the market, he said: “The timing will purely be a function of the market sentiments. We do not want any frothiness or instability in the market. The outside limit would be 12-18 months.”

Emaar MGF is a joint venture between Dubai-based Emaar Properties and MGF Development Ltd.

The company wanted to raise about Rs 6,500 crore, on the initial price band of Rs 610-690. This was twice revised to Rs 530-Rs 630 and the closing date extended to February 11 from 6.

Another company issuing an IPO, SVEC Constructions, today lowered its price band to Rs 80-90 from Rs 85-95. The closing date was also extended to February 13 from February 8.

Pricing an issue

Some analysts attributed the issue failure to Dubai-based Emaar Properties quoting at about 12.15 dirham (Rs 130) against the Emaar MGF price band of Rs 530-630.

“Sentiment in both the local and global markets is weak now. If mega issues follow one another in rapid succession there will definitely be some sort of liquidity problems for investors.

“Lead managers have to price issues more realistically,” Mr Kaushal Sampat, Chief Operating Officer, Dun & Bradstreet Information Services, said.