Bharti Infratel, Care issues fail to prop up IPO financing business
“There was some demand for IPO loans for the Care Ratings issue, but it was confined to a few large-ticket purchases from select HNIs. Also, the business was largely concentrated with the NBFC arms of brokerages, such as JM Financial, Edelweiss and IIFL, which meant other NBFCs couldn't benefit much from the issue,” said a senior broker familiar with the developments in the IPO loan market. “The bigger disappointment, though, was that the Bharti Infratel issue found few takers for IPO loans among HNI investors,” he added.
“The loans given out for the Care issue were in the range of R2,000 to R2,500 crore. The demand was driven by expectations that the issue would list at a substantial premium and gain up to R200 within 2-3 days of listing,” said another broker. “The demand for Bharti has been quite low as investors are not expecting significant listing gains.”
With an issue size of about R4,500 crore, market participants had pinned their hopes on the success of the Bharti Infratel issue, which was expected to be subscribed more than five times at the least. The issue was oversubscribed 1.29 times as on 6 pm
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