REC issue finally a success; subscribed over three times

The Rs3,500 crore follow-on public offer of the Rural Electrification Corporation saw a dramatic turnaround on Wednesday. After staying on the sidelines for the past couple of days, institutional investors rushed in just before the issue closed. The overall subscription picked up sharply and finally ended at 3.14 times.

The qualified institutional book was subscribed 5.6 times and non-institutional investors two times. But the retail part remained undersubscribed, at just about 0.23 times (or 23 per cent).

CNBC-TV18 reports that Life Insurance Corporation is unlikely to get any allotment. It had put in a Rs3,000 crore bid at Rs205 per share. The State Bank of India too is unlikely to get any allotment, as foreign and private investors had put in better bids.

Under the French auction method, the book was fully subscribed at Rs206 per share. FII demand stood at one times the FPO book. HSBC puts in an Rs 1,000 crore bid at Rs 206 per share.

Atul Mehra of JM Financial - one of bankers to this issue – said about 145 institutional investors had bid for the REC offer. ''FIIs and banks have put in nearly 80 per cent of bids,'' he told CNBC-TV18.

According to Mehra there was 100-per cent allotment to investors with bids of over Rs206 per share.