Road maintenance and toll-collection operator MEP Infrastructure’s initial public offering (IPO) was subscribed 0.18 times on the first of the three-day bidding. The issue closes on Thursday. The institutional investor category was subscribed 0.18 times. Qualified institutional buyers (QIB) bid for nearly 50 lakh shares against 2.74 crore shares on offer.
The non-institutional category, comprising high net-worth individuals (HNIs), was subscribed 0.1 times. About 8 lakh shares were bid for against 77 lakh shares on offer, stock exchange data showed.
Retail investors, whose investment should not exceed a total R2 lakh as per Sebi rules, bid for 13.1 lakh shares against 51.42 lakh shares on offer. The retail book was subscribed 0.26 times.
Many domestic financial services firms have cautioned investors on the issue, citing the company’s financial performance and a recent Maharashtra government’s announcement to close toll plazas.
FE reported the Maharashtra government’s 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 aims to raise a total of R324 crore from public investors. The proceeds will be utilised 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 the issue.
MEP’s is the fifth public issue on the main board this calendar year. Two more public issues are in queue and may hit the markets within a fortnight. UFO Moviez India’s R600-crore issue will open on April 28, while Sadbhav Infra — with an estimated issue size of R550-650 crore — will likely hit the markets in early May.
So far, four companies — Inox Wind, VRL Logistics, Ortel Communications and Adlabs Entertainment — have tapped primary markets this calendar year, cumulatively raising upward of R2,000 crore.