Reliance whip goes to 12,000

By agencies   |   Friday, 21 April 2006, 07:00 Hrs
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MUMBAI: History was made on the bourses late on Thursday evening. Even as bids continued to pour in at 73 collection centers across the country, Reliance Petroleum’s initial public offering got a resounding thumbs up from domestic and international investors. Mukesh Ambani’s much-awaited $6.1 billion retail offer received bids worth $3.11 billion, an over subscription of over 50 times. The company had offered to sell 45 crore shares but ended up receiving applications for over 2226 crore shares. The response has created a record of sorts for any public offering not just in India but also across the world. A record 1.9 million retail investors from India made bids paying an average $ 450 in application money, oversubscribing their quota by 10 times. In fact, Sebi has allowed the company a special concession by letting its merchant bankers to log on bids on the computers of the two stock exchanges till midnight It only emphasizes that there are enough and willing retail investors for the right issue." Interest from institutional and foreign investors has also been overwhelming for the issue. Qualified institutional bidders (QIB) oversubscribed their portion of the issue by 55 times. According to an issue manager, two banks — UBS and Citibank — bought in bids worth over $7.5 billion, just as much as the foreign direct investment in India last year. Kuwait-based investors put in bids for $600 million. Merchant bankers and the broking community are suggesting that the success of the issue may well be the biggest signal that the retail investor is willing to invest in the stock market again. Says an investment banker: "Retail investor are paying a substantial premium for a company whose project is still in paper. It shows that there is a large equity appetite among domestic investors."

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