MOIL public offer subscribed 54 times

The retail investor segment subscribed over 25 times.

Manganese ore producer MOIL’s initial share sale offer received thunderous response from both retail and wealthy investors on the last day of bidding on Wednesday, taking the overall subscription to over 54 times.

The categories reserved for retail and non-institutional investors (NIIs), which includes bid from high networth investors (HNIs), were subscribed over 25 times and 150 times, respectively. The portion reserved for institutional investors was subscribed 49.16 times on Tuesday, the last day of bidding for this category. The employee category was nearly fully subscribed.

Retail investors and MOIL employees will get an additional five per cent discount of the final issue price. The price band for the offer was fixed at Rs 340-375.

Due to the heavy demand for the issue, exchanges were forced to extend the bidding time till 7.00 pm for retail investors and employees.

Most analysts attribute the success of the issue to its attractive valuation and small issue size. “Attractive pricing, premium in the grey market and small size are the prime reasons behind the kind of response from investors,” said Arun Kejriwal, founder of Kejriwal Research and Investment Services (KRIS).

The Indian government is divesting 10 per cent stake in the company through the issue, while the state governments of Maharashtra and Madhya Pradesh are divesting five per cent stake each. At Rs 375 per share, the issue of 33.6 million shares will fetch over Rs 1,200 crore to the selling shareholders.

Coal India’s performance after listing also had a rub-on effect on the subscription of MOIL, said experts. The coal producer’s shares gained over 40 per cent on the listing day and are still trading well above their issue price of Rs 245 per share. Coal India shares closed at Rs 321.30 on the National Stock Exchange today.