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13 June 2024

Emaar MGF IPO hit by market slump

By Agencies


An Indian joint venture of Dubai’s Emaar Properties yesterday delayed the close of its initial public offering until Monday and cut its price for a second time, reflecting turbulent global markets.


The IPO for realty firm Emaar MGF Land, which was scheduled to close yesterday, had received 76.6 million bids, or 75 per cent of the issue of 102.57 million shares, mostly at the lower end of the price band, data from the National Stock Exchange showed.

The company first cut the offer price range on the eve of the opening on February 1, because of volatile market conditions.


The price range, initially set at Rs610-Rs690 (Dh57-Dh65) per share, was cut at that time to Rs540-Rs630, reducing the maximum it could raise to $1.64 billion (Dh6bn), down from $1.8bn.


Yesterday, it reduced the lower end to Rs530.


“This marginal revision in the price band is in conformity with the Securities and Exchange Board of India [market regulator] guidelines on extension of the bidding period,” Emaar said in a statement.


Earlier, a banking source with direct knowledge of the issue said the decision was prompted by depressed markets. India’s benchmark index ended down 2.8 per cent.


“Today was the wrong day to close the IPO with most markets in Asia down,” the banker said.


In contrast, Reliance Power’s $3bn issue a few weeks back was snapped up by investors in one minute.


Reliance Power, part of Anil Dhirubhai Ambani Group, attracted bids worth $190bn and priced its offer at the higher end of its price band, at Rs450 a share. It will be listed on India’s stock exchanges next Monday.


After a five-year bull run in the Indian stock market, Indian companies were forecast to raise up to $15.8bn from new listings this year, nearly double the record $8.3bn raised in 2007, according to Thomson Financial data.


But investor sentiment has wilted as the main BSE index recorded a 14.5 per cent fall from its life-high of 21,206.77 points struck on January 10. Other IPOs have also taken a hit.


Wockhardt Hospitals Ltd, which extended its IPO by two days until today, had received bids for only 10 per cent of its 25.1 million share issue yesterday.


IRB Infrastructure Developers yesterday priced its offer of 51 million shares at Rs185 a share, the lower end of its price band. The offer was subscribed 4.3 times.


But India is still better off than other markets. A total of 21 IPOs globally, worth a combined $6.3bn, were withdrawn in January due to the volatile markets, Thomson Financial said. (Reuters)



The numbers


Rs530: the reduced lower-end price of Emaar MGF Land IPO

$3bn: issue of Reliance Power was snapped up in one minute