IPO of Speciality Restaurants oversubscribed

After two back to back withdrawals, the initial public offering (IPO) of restaurant chain operator Speciality Restaurants managed to successfully sail through, thanks to good bidding by institutional investors. The 11.74-million share offering received about 2.5 times subscription, with most bids coming from the qualified institutional buyers (QIB) category.

The issue received 4.68 times subscription from the QIB category and 2.2 times from the wealthy investor category, while the retail segment remained undersubscribed at just 0.44 times, data on the National Stock Exchange at 5 pm showed.

The company that operates restaurant chain Mainland China will be able to garner about Rs 180 crore from the IPO, if it’s priced at the top end of the band of Rs 146-155 per share.

The success of the issue will come as a big relief for the primary market, after the offerings of Samvardhana Motherson Finance and Plastene India were withdrawn due to poor investor response, amid weak secondary market conditions. Weak market conditions had cast doubts on the success of the Speciality Restaurants’ IPO, too, as it had received only two per cent subscription till the penultimate day.

An investment banker handling the issue said the IPO had received good response from mutual funds and foreign institutional investors, most of whom invested on the last day due to the 100 per cent margin requirements. Speciality Restaurants had raised Rs 26 crore from anchor investors, including Morgan Stanley, Reliance Capital and HSBC, by allotting 1.76 million shares at Rs 150 apiece.