Realty giant DLF Ltd, which is raising Rs 9,625 crore through the country's largest initial public offering (IPO) of shares next month, has provided for an option under which retail investors can invest only Rs 150 per share on application against the price band of Rs 500 to 550 per share of Rs 2 each.
This is in line with the precedent set by ICICI Bank and later followed by Reliance Petroleum. ICICI Bank has also introduced discounts for retail investors.
Only retail bidders will be eligible to bid by paying Rs 150 per share on application. Of this, Re 1 will be credit to the face value and Rs 149 towards the premium. “The balance amount will be payable by the due date,” said Rajiv Singh, DLF's vice-chairman.
All other investors, except qualified institutional players (QIPs), have to apply with full payment. QIPs are allowed to pay only 10 per cent on application under Securities and Exchange Board of India (SEBI) norms. The issue will remain open from June 11 to 14. At the lower end of the price band, the company will be in a position to raise Rs 8,750 crore.
Though DLF’s IPO was planned to raise Rs 13,000 crore more than a year back, the issue size was scaled down to the present level by lowering the number of stocks involved in the public offer to about 10 per cent post-issue as against the earlier plan that would involved a post-issue public float of about 12.5 per cent. In all, 17.5 crore shares are on offer now.
“Earlier promoters were also were planning to offer 1.4 to1.5 per cent of their stake in the IPO. However, that was withdrawn now. Besides, a greenshoe option that was planned earlier is also not there,” said Ramesh Sanka, Group chief financial officer of DLF.