ITI withdraws Rs 1400 crore FPO; cites this key reason for undersubscription

By: |
February 05, 2020 5:45 PM

The government-run ITI on Wednesday said that it has withdrawn the Rs 1400 crore worth follow-on public offering (FPO) citing 'prevailing market conditions'.

ITI shares settled at Rs 83.90, up 3.35 points, or 4.16% on NSE.

The government-run ITI on Wednesday said that it has withdrawn the Rs 1400 crore worth follow-on public offering (FPO) citing ‘prevailing market conditions’. It comes as the FPO remains unsubscribed despite two extensions. Even as the closing date of the FPO was revised two times along with the price band, the issue was only subscribed 62 per cent as of 4:45 pm Wednesday. Last it was on February 5, 2020, the company extended the offer period citing bank strike. ITI shares settled at Rs 83.90, up 3.35 points, or 4.16% on NSE.

“We wish to inform you that, pursuant to a resolution passed by the FPO committee of the Company dated 05th February 2020, the Company has decided to withdraw the Issue, due to the prevailing market conditions, in consultation with the Book Running Lead Managers to the Issue, being BOB Capital Markets Limited, Karvy Investor Services Limited, and PNB Investment Services Limited”, ITI said in a regulatory filing.

Also read: Sensex, Nifty rise for the third-day straight; what moved the markets & what do analysts say?

ITI FPO opened on January 24, 2020. The state-run company intended to raise about Rs 1,400 crore of which Rs 607 crore will be utilised for repaying loans. The issue was then slated to be closed on January 28, 2020. The company was to sell its 18 crore shares, besides one per cent (18 lakh shares) quota for the employees, in the bracket of Rs 72 to Rs 77 per share.

Meanwhile, extending its gains for the third consecutive session, market benchmark Sensex rallied 353 points on Wednesday as reports of a breakthrough in coronavirus treatment enthused global investors. Domestic participants also cheered improving business sentiment after a survey said India’s services sector activity surged to a seven-year high in January. The 30-share BSE Sensex settled 353.28 points, or 0.87 per cent, higher at 41,142.66. It hit an intra-day high of 41,154.66. Similarly, the broader NSE Nifty rose 109.50 points, or 0.91 per cent, to 12,089.15.

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