Poor response forces one more company to take a hard look at its public issue. Samvardhana Motherson Finance, which planned to raise about Rs 1,665 crore — the biggest IPO from the private sector in the last three years, on Friday deferred its public issue. This was due to poor subscription of 23.17 per cent of the issue size.

The company had set a price band of Rs 113-118 a share for the issue. The issue was open from May 2-4. The IPO included a fresh issue of Rs 1,344 crore and an offer for sale of Rs 321 crore by Radha Rani Holdings Pte Ltd.

advise

“In light of the weak equity market conditions and volatile currency movements, the company on the advice of the book running lead managers has decided to defer its proposed Initial Public Offering (IPO),” Samvardhana said in a statement.

According to reports, this was the largest private sector offer after JSW Energy mopped up about Rs 2,700 crore through an IPO in December 2009.

Earlier this year, Goodwill Hospital — the first public issue of 2012 — withdrew its IPO due to poor investor response. The Rs 62-crore issue of the healthcare firm, which was open from December 30, 2011, to January 9, 2012, was subscribed a mere one per cent on the penultimate day, according to bid data collated from NSE and BSE.

Bharat Heavy Electricals Ltd recently informed the BSE about the withdrawal of its draft red herring prospectus. The company filed the DRHP in September last year for its follow-on public offer through which the Government was supposed to offload five per cent stake.

Samvardhana Motherson had raised about Rs 222 crore from anchor investors. Among them were First State Investments ICVC through their depository — The Royal Bank of Scotland, First State Investments (Hong Kong), Ivy Pacific Opportunities Fund, Birla Sun Life, Government of Singapore and Monetary Authority of Singapore.

>badri@thehindu.co.in

Related Topics
comment COMMENT NOW