Religare
enjoys premium listing at the bourses
21 November 2007
That
the broking business is here to stay has been amply demonstrated by the premium
listing enjoyed by Ranbaxy-promoted Religare Enterprises Limited today at the
bourses. The
shares with a nominal value of Rs10 each and priced at Rs185 after the book-building
process, debuted at a premium of 75 per cent at Rs323.75 and rapidly accelerated
to Rs601 on the National Stock Exchange. On
the Bombay Stock Exchange, it started at Rs323.75 before touching Rs600, and closed
for the day at Rs519, at a stupendous first-day premium of 180 per cent. This
is all the more notable on a day the benchmark Sensex fell by over 600 points
and the Nifty declined by more than 200 points. The
markets had expected a significant upsurge in the share price on its debut considering
the tremendous interest the IPO had generated. The issue, which was open between
29 October and 1 November, and priced between Rs160 and Rs185, garnered an oversubscription
of over 160 times. While
qualified institutional bidders bid for 185 times the shares allocated to them,
even the retail portion was oversubscribed 93 times. Promoted
by the promoters of Ranbaxy Laboratories Limited, Religare's issue has been graded
by ICRA Limited and assigned the IPO Grade 3 on a five point scale. The net proceeds
of the issue will be utilised towards the expansion of domestic operations as
well as the network of branches of two of its subsidiaries, Religare Securities
Limited and Religare Insurance Broking Limited; funding the retail finance business
as well as funding the leading business, through investment in its subsidiaries,
Religare Finvest Limited and Religare Finance Limited. Religare
Enterprises Limited is a holding company of 11 subsidiaries, which are engaged
in the business of providing a wide range of financial products and services targeted
at the retail, high net worth individuals and the corporate and institutional
clients. Along with its various subsidiaries, it offers a wide range of services
ranging from equities, commodities, insurance broking, to wealth advisory, portfolio
management services, personal finance services, investment banking and institutional
broking services. It has divided its product and service offering under three
broad client interface categories: "Retail Spectrum", "Wealth Spectrum"
and "Institutional Spectrum". Religare
has a presence throughout the country, with more than 1200 operational outlets
across 350-plus cities and towns. The company had issued 76 lakh shares and mopped
up Rs.141 crore from the markets, which it intends to use for aggressive expansion
plans. The
earnings per share (EPS) of the current financial year are expected to be Rs12,
while the issue had been priced at 14 times the estimated FY 2009 EPS of Rs13.
This phenomenal listing has also raised expectations for another financial services
firm Edelweiss which is going to list soon and had also attracted 110 times subscription
to its IPO. General
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