Idea Cellular IPO records huge institutional demand

16 February 2007

Mumbai: The public issue of mobile operator Idea Cellular has surpassed the record created by Reliance Petroleum, generating the highest ever demand from institutional investors who put in bids for over 90 times the shares allotted for the segment.

The issue generated demand worth $25.6 billion in the 'qualified institutional buyers' (QIB) segment, surpassing the previous record of $25.3 billion in this space registered by the IPO of Reliance Petroleum last year, merchant banking sources said.

Bankers said that acquisition of a controlling stake in the country`s fourth largest mobile player Hutch-Essar by the world`s largest mobile operator Vodafone further fuelled investors` interest in the issue.

Idea Cellular`s IPO, which closed yesterday with an overall over-subscription of 57.1 times, generated total demand worth $27.5 billion. Reliance Petroleum's IPO had, however, generated a higher total demand worth $31.9 billion.

The public issue of the the country`s fifth largest mobile operator was oversubscribed by 4.5 times in the retail segment, by 26.3 times in the High net worth individuals segment, while the quota reserved for the company`s employees was oversubscribed by 2.6 times.

Among the institutional investors, the issue received strongest demand from foreign institutional investors (FIIs), who bid for shares worth about $20 billion, based on the upper end of the price band of Rs65-Rs75 a share.