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Friday, February 08, 2008
Emaar MGF Land calls off IPO
Emaar MGF Land calls off IPO as subscription falls to 43 per cent news
Mumbai: Close on the heels of Wockhardt Hospitals shelving its initial public offer, Emaar MGF Land, the Indian joint venture of Dubai's Emaar Properties, today cancelled its on-going initial public offer.
Wockhardt Hospitals withdrew its initial public offer yesterday.
Emmar was forced to call off the issue after the subscription level fell to 43 per cent from 85 per cent in the morning, indicating that subscribers had started cancelling their applications.
Emaar MGF had floated an IPO of 10.25 crore equity shares to raise about Rs6,450 crore at the upper band of Rs530-630 a share for the Rs10 face value shares.
Emaar had cut its price band twice and extended its IPO by three days to February 11 after a weak response to the issue in a volatile market.
"The company decided to take this step as a result of the prevailing adverse market sentiments, fuelled by renewed indications of a US recession and global meltdown," Emmar MGF Land said in a statement.
While stock exchange data showed that the Emaar MGF issue was subscribed only 43 per cent, the company claimed that qualified institutional buyers (QIB) and high networth individuals (HNI) portions were fully subscribed and the book was already close to 85 per cent.
"Given the prevailing sentiments in the capital markets it was unclear how well the stock would trade post listing," Emaar said, adding, "It has been considered wiser to revisit the markets only when the demand and sentiment is stable and better providing greater value to the investor."
Sources close to Emaar MGF said the company would refund the application money in the next 10 to 15 days.
On Thursday, Wockhardt Hospitals Ltd shelved its initial public offering, becoming the first Indian listing hopeful to pull its deal as market turbulence sapped appetite for risk. Wockhardt shelved its IPO after it got subscriptions for only a fifth of the offering of 25.1 million shares after extending the period and cut the price..
Analysts, however, find fault with the aggressive pricing of IPOs rather than on market volatility. Public issues will still attract investors if companies price their offers moderately, they say.
Source : domain-b.com