Despite volatile market conditions over the past one week, Standard Chartered?s fund raising programme through the issue of Indian Depository Receipt (IDR) received an overwhelming response from institutional investors on the final day of the offer. The issue was subscribed 2.20 times, receiving bids for 44.90 crore IDRs. While qualified institutional buyer (QIB) portion was subscribed around 4.1 times, high net worth individual (HNI) part was subscribed 1.9 times while retail remain undersubscribed at 0.25 times, according to NSE data.
In the 50% quota reserved for the QIB category, majority of the bids came in the last hour. A Rajagopal, MD & head of global capital markets in India for UBS, said, ?The fact that most applications came in on the last day is not surprising since this is the first transaction where institutions need to pay 100% of the subscription amount rather than 10%. So there is really no incentive for them to bid early.? He believes this could be the trend for other issues too.
Of the total bids received under the QIB portion, 72% came from FIIs, another 19% from domestic mutual funds while the remaining 9% came from domestic banks and other financial institutions. Senior company officials said that top blue-chip mutual funds had shown keen interest in the issue along with big private and public sector banks and corporates.
?The response to our offer was absolutely fantastic despite the adverse market condition in the past one week,?said Jaspal Bindra, CEO, Asia, Standard Chartered Bank. He said the domestic mutual funds which showed keen interest under the anchor investors category, topped up once again in the open book building process. ?Even the last hour response from retail investors is not disappointing under the current market conditions and also considering the fact that IDR is a new instrument in India,? he said. On Monday, the company had raised Rs 374 crore by roping in six anchor investors, who had subscribed for 3.6 crore IDRs, accounting for 15% of the overall shares on offer.
The company had fixed the price band for the issue in the range of Rs 100 ? 115 per IDR, hoping to raise up to Rs 2,760 crore at the upper end of the price band. However, company officials admitted that majority of the bids came between Rs 104-106, with bids from anchor investors coming at Rs 104. The company plans to list the IDR by June 11, 2010.