1. MEP Infra IPO subscribed 1.1x on day 3; retail wary

MEP Infra IPO subscribed 1.1x on day 3; retail wary

MEP Infrastructure’s initial public offering (IPO) successfully sailed through on the third and final day of bidding.

By: | Published: April 24, 2015 12:12 AM

MEP Infrastructure’s initial public offering (IPO) successfully sailed through on the third and final day of bidding. The issue of road maintenance and toll-collection company was subscribed 1.11 times as on 7 pm on Thursday, assuring the company of at least R325 crore from the pre-IPO placement as well as the public bidding.

The issue was subscribed 0.33 times at the end of the second day and 0.18 times on day one, stock exchange data showed.

Institutional investors’ category received bids 1.02 times the shares offered. Qualified institutional buyers (QIB) applied for 2.79 crore shares against 2.74 crore shares on offer.

mep

The non-institutional category – comprising of high net-worth individuals (HNIs) – was subscribed 1.51 times. About 1.2 crore shares were bid against 77 lakh shares on offer, stock exchange data showed.

Retail investors gave a tepid response to the issue when compared with some of the recent IPOs like Inox Wind and VRL Logistics. The category, whose investment should not exceed a total R2 lakh as per Sebi rules, bid for 50 lakh shares compared with 51.42 lakh shares on offer. The retail book was subscribed 0.97 times.

Many domestic financial services firms have cautioned investors on their decision to subscribe to the issue citing the company’s financial performance and a recent Maharashtra government’s announcement to close toll plazas. FE reported the Maharashtra government decision may hurt road revenue of infrastructure companies.

The Maharashtra government has decided to exempt cars and state transport buses from paying toll from June 1 as part of its state election promise in October 2014. Chief minister Devendra Fadnavis announced the closure of 12 toll plazas in the state last week.

Mumbai-based MEP raised R72.4 crore by issuing 1.11 crore to anchor investors in a pre-IPO placement on Monday. The allotment was made at R65 per share. The issue is priced in the range of R63-65 per piece.

The company had aimed to raise a total of R324 crore from public investors. The proceeds from the public issue will be used for general corporate purposes and toward repayment of R262 crore of the total loan availed by subsidiary-company MIPL.

IDFC Securities, INGA Capital and IDBI Capital Markets are financial advisors to MEP Infrastructure.

MEP is the fifth IPO on the main board this calendar. So far, four companies – Inox Wind, VRL Logistics, Ortel Communications and Adlabs Entertainment — have tapped primary markets in 2015.

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Tags: IPO
  1. d
    d.l.V
    Apr 25, 2015 at 8:32 pm
    As long as corporates look to shares as easy money to loot with no obligation of returns, even the money they are getting is very great responsestead of providing investment avenue to get returnto public, they are looking it as interest free money with no logic for premiums and no promise of performance. If govt is serious about public investment , rule has to be brought back that the shares cannot be priced more than net worth of company on the day of investment. Like Birlas who are masters in looting bank and public funds and becoming owners of copanies without stake of even one reupee and even investment shown is notional , should not be allowed to price based on notional b value. Another major step is companies should not be allowed to show land value in their net worth Time has come for banks not to advance funds based on b value and land value. Loot by corporates have to be stopped and channelised to productive investment.Modi 's love game with corporates should stop and no public fund largess without commitment. Modi has already started looting PF without giving even SB interest after due date.. No way companies use our bank money and show their investments and net worth.
    Reply
  2. d
    d.l.V
    Apr 25, 2015 at 8:43 pm
    Clearly shows public do not believe corporates . Not a good sign and lack of faith.. Public shares allotted with huge illogical premiums and is a big scam with corporates and government playing hand and glove to loot public money with no obligation of returns. Time bring back rules , shares are priced on net worth on that day.Stop hankey pankey b value premiums.With so many scams no one has any b value
    Reply

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