IEX cancels anchor allotment to overseas investors

IEX finalised allotment of shares worth Rs 300 cr in the anchor category to clutch of domestic, overseas investors

Indian Energy Exchange (IEX) has revoked the allotment made to foreign portfolio investors (FPIs) in the anchor category. The move was triggered by a communication from the custodians that FPIs were not eligible to participate in the initial public offering (IPO). 

On Friday, IEX had finalised allotment of shares worth Rs 300 crore in the anchor category to a clutch of domestic and overseas investors. Some of the FPIs allotted shares included JP Morgan, Nomura and Baillie GiffordIEX. 

The shares allotted to these investors will now be offered to institutional investors that bid in the qualified institutional buyer (QIB) category of the IPO. 

IEX’s Rs 1,000-crore IPO, which closed on Wednesday, was subscribed over two times. The QIB category too saw over two times demand the shares on offer. 

“The company has issued a public notice (an addendum) that additional shares, which were earlier to be allotted to FPI Anchor Investors have now become available for allocation in the QIB portion of the Offer,” said a company spokesperson in a statement. 

Investment bankers said there was enough demand in the IPO to absorb the shares earlier allotted to FPIs in the anchor book. 

“The company would like to reiterate that this development is arising out of regulatory concerns raised by the custodians rather than any pricing concern. The anchor book, which is available in the public domain, identifies the calibre of investors who were interested in participating in the offer and shows their confidence in the company,” the statement added. 

FPIs will be able to buy shares of IEX in the secondary market once the company lists, they added. 

IEX is India’s largest power trading exchange. As per the FDI policy, FPIs are only allowed buy shares of a power trading exchange in the secondary market.