Indian IPO

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Friday, August 29, 2008

Reliance Infratel IPO deadline lapses

Reliance Infratel, the telecom infrastructure unit of Reliance Communications, is learnt to have deferred its plans for an initial public offering (IPO) because of the current volatility in the stock markets.

The outer deadline for completion of its IPO was August 11. A company has to complete the IPO process within 90 days after obtaining SEBI’s observations on its draft red herring prospectus.

Reliance Infratel had got the regulator’s approval for its proposed IPO on May 12. The prospectus was filed with SEBI on February 4.

The deadline, after which the regulator’s approval lapses, has passed without any announcement of an initial public offering by the company.

A spokesperson for Reliance Communications declined to comment on this development. It could not be ascertained whether the company would revive its IPO plans in the immediate future.

This is the third major IPO that is being deferred in recent times after that of commodity exchange MCX and mutual fund company UTI AMC. This clearly reflects the falling level of confidence among corporations and investors in the Indian financial markets, analysts said.

Moreover, all the Anil Dhirubhai Ambani Group stocks have been losing ground on the bourses. Analysts feel that the poor performance of the Reliance Power scrip, post its listing, could have also prompted the company to go cautious with the Infratel IPO. On the very day the RPower issue was listed, the scrip slipped below its offer price of Rs 450.

Reliance Infratel intended to issue 8.91 crore shares constituting 10.05 per cent of the post-issue paid-up equity capital of the company. Through this IPO, the company was expected to mop up about Rs 6,000 crore from the capital markets, reports The Hindu Business Line.

20 Microns IPO opens on Sept 8

20 Microns, a pioneer and leader in the micronised minerals and trend setter in the market for usage of ultrafine minerals for the Paints & Plastic Industries, proposes to enter the capital markets on September 8, 2008 with a public issue of 43,50,632 Equity shares of Rs 10 each through 100% book building process. The IPO will close on September 11, 2008. The company has fixed the price band between Rs 50 and Rs 55 per equity share.

The issue consists of a fresh issue of 16,75,000 equity shares of Rs 10 each and an offer for sale of 26,75,632 equity shares by Gujarat Venture Capital fund 1995. Up to 2,17,532 equity shares will be reserved for subscription by eligible employees. The issue will constitute 30.81% of the post issue paid up capital of the company. The issue has been graded by the Credit Analysis & Research (CARE) and has been assigned the IPO Grade 3 indicating Average Fundamentals.

The company intends to utilize the proceeds of the fresh issue in the IPO towards the current ongoing expansion plans of the manufacturing capacities at various locations, invest in the sub-micron particle sizes required by end-market and general corporate purposes.

The equity shares are proposed to be listed on Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd.

The book running lead manager is Keynote Corporate Services Limited.