Muthoot Raises Hopes of More IPOs
Mumbai, India, April 21, 2010 Muthoot Finance Ltd.'s initial share offering to raise up to 9.01 billion rupees ($202.7 million) was heavily subscribed on its final day, a sign that investor appetite for initial public offerings may have returned. The gold financier received bids for 24.24 times the shares on offer at the end of trading on Thursday, data on the National Stock Exchange showed. Muthoot offered 51.5 million shares, including 7.73 million shares sold to anchor investors earlier, and sold at the higher end of its initial price band of 160 ($3.60) to 175 rupees ($4) apiece. The issue opened for subscription on Monday. The lender, which lends to people against gold held as security for the loans, raised 1.31 billion rupees ($29 million) through the sale of 7.73 million shares at 170 rupees per share to 15 anchor investors last Friday. The company will use the money to bolster its capital base to meet future needs as it expands its lending base. The issue is the largest initial share sale in India so far this year, according to data provider Dealogic. The response to the share sale is a positive indication of investor appetite, and augurs well for companies including L&T Finance Holdings Ltd. and Micromax Informatics Ltd. that have been waiting for market sentiment to recover before launching their IPOs this year. Future Ventures India Ltd. whose 7.5 billion ($168.8 million) opens Monday, will hope to tap into this demand, bankers said.
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