MUMBAI: After a dull IPO (Initial Public Offer) market last financial year, the pick-up in momentum during the early part of 2019-20 fiscal looks like it is mirroring the bullishness in the secondary market. Polycab India’s IPO was subscribed 51.82 times by 4 pm on Tuesday, on the last day of its book building, with institutional book getting subscribed 93.09 times.
“It is a quality offer, at reasonable valuation, and investors are looking at decent listing gains. But not just equities, even debt issues are attracting investments,” said a long-time IPO market participant. The subscription amount for Polycab at the level subscriptions received was around Rs 49,000 crore.
L&T Finance’s AAA-rated NCD (non-convertible debenture), which opened for subscription on April 8, announced closing the issue on day two, after raising more than Rs 3,200 crore on the Rs 1,000 crore issue. After the credit events of 2018, non-banking financial companies have been tapping public issue market to raise money, and FY20 has already seen a handful of issues in the market.
On Wednesday, Vodafone Idea’s Rs 25,000 crore rights issues opens for subscription, with an assurance from the promoters, Vodafone as well as Aditya Birla Group, to subscribe to their rights component bringing in Rs 11,000 crore and Rs 7,250 crore respectively. Vodafone Idea rights entitlement is 87 equity shares for every 38 shares held, and it is priced at Rs 12.50 a share. Retail subscription to the issue would be keenly watched by the market.
Appetite for Indian paper has been positive in the offshore markets as well. IndusInd Bank announced pricing its $400 million medium-term note at 3.875 per cent coupon with the order book in excess of $1.4 billion. “IndusInd Bank has made a successful debut in the offshore bond markets through a benchmark three-year issuance. We are happy to see the response received on this offering to global fixed income investors,” said managing director and chief executive officer Romesh Sobti.
Another large issue in the offing is the Uttar Pradesh-based thermal power generation company Bajaj Energy. It has filed its DRHP with Securities and Exchange Board of India and is looking to raise around Rs 5,500 crore in an IPO, and likely to hit the markets by July or August.