Voltamp IPO oversubscribed 17 times

The demand for the offering among institutional investors and mutual funds is spurred by its relatively small size.

india Updated: Aug 30, 2006 18:29 IST

On the heels of successful initial public offers of Tech Mahindra and GMR Infrastructure, the initial public offering of power transformer maker Voltamp has been oversubscribed by more than 17 times.

Most of the bids for the public issue, which closed on Tuesday, came from the institutional investors, while demand from the retail investors was relatively subdued.

According to the data available with stock exchanges, the Voltamp issue was oversubscribed by 17.65 times, while receiving over 8.6 crore bids for a total issue of 48.8 lakh shares.

The price band for the Voltamp issue has been fixed at Rs 295-345 per share and the investment banking sources said the issue could be priced at about Rs 300 per share, taking the total IPO proceeds to nearly Rs 150 crore.

The relatively small IPO of Voltamp Transformers Ltd witnessed robust demand in the qualified institutional investors (QIBs) segment with both foreign institutional investors and domestic mutual funds reposing their faith in the issue.

The QIB portion was subscribed by over 25 times while the retail segment saw a demand of over six times of the portion reserved for them.

The non-institutional investors submitted bids of over 23 times of the reserved portion.

The market observers said the investors were probably enthused by the success of Tech Mahindra and GMR issues, which were oversubscribed by more than 72 and 7 times respectively.

The investors' interest in the public issue is expected to have been further boosted by the strong listing of Tech Mahindra, which surged ahead more than 51 per cent in its debut trade on August 28.

However, the issue was fully subscribed on August 28 with more demand coming from investors on the back of a strong listing reported by Tech Mahindra.

The IPO, which doesn't involve any fresh issue of shares, constitutes 48.27 per cent of the post issue paid-up capital of the company. The promoters' stake would go down to 51.73 per cent after the IPO.

Voltamp plans to list its shares on the Bombay Stock Exchange and the National Stock Exchange.

ENAM Financial Consultants is the book-running lead manager and Intime Spectrum Registry is the registrar to the issue.

First Published: Aug 30, 2006 15:24 IST