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Our Bureau

Mumbai, Sept. 11 The initial public offering of 20 Microns, the first company whose IPO falls under SEBI’s Applications Supported by Blocked Amount (ASBA) process, was subscribed 4.29 times.

The issue had opened for subscription on September 8 and closed on Thursday. It received 1.8 crore bids against the 43.5 lakh equity shares on offer.

Through the ASBA system, investors can apply to the five Self-Certified Syndicate Banks (SCSB) in order to block their IPO application money in a bank account. The five SCBS are SBI, HDFC Bank, ICICI Bank, Corporation Bank and Union Bank. The application money will remain in the bank accounts until the IPO allotments are finalised.

When compared with the response to the IPOs in the recent past, the investor interest in the 20 Microns issue was much better, said market men.

Among the IPOs between mid-June and August, Resurgere Mines and Minerals’ IPO was subscribed by 1.16 times, Austral Coke 1.65 times, Birla Cotsyn 1.1 times, Lotus Eye Care 1.18 times and Archidply’s by 1.52 times.

The Vice-President of research at a brokerage said the performance of the recent IPOs, post-listing, would also have encouraged investors to invest in this particular IPO. Many of the recent issues had listed at a hefty premium to their issue price.

The retail participation in the 20 Microns IPO was also good when compared with other recent IPOs. The portion reserved for the qualified institutional buyers (QIB) was subscribed 0.9 times, while the portion reserved for the non-institutional investors (NII) was subscribed 1.97 times.

The retail portion was subscribed by 10.58 times.

“The ASBA method is also another reason why this issue attracted investor attention. This system will help the retail investors whose IPO money used to be blocked for a long period of time even when they were not allotted shares,” said Mr Alex Mathew, Head of Research, Geojit Financial services.

He also said this system could revive investors’ interest in primary markets, the main reason being that their money will not be locked unnecessarily.

However, ASBA application figures for the 20 Microns issue were not immediately available.

“There has been a lot of enquiry from investors about this system since the announcement, which is a sign that this will be quite popular in time to come,” said Mr Mohan Tanksale, General Manager of Transaction Banking, Union Bank of India.

More Stories on : IPOs | Minerals

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