New Delhi: The First CPSE disinvestment for the fiscal year 2015-16 got off to a thumping start today with the Rural Electrification Corporation (REC) OFS getting fully subscribed within one and a half hour of opening.
On offer was 5% paid-up capital of the company comprising 4, 93, 72,950 shares, each of Face Value of Rs 10. Out of the shares offered for sale, 20% were reserved for retail investors i.e. those investors who placed bids for shares of total value of not more than Rs 2.00 lakh. In addition, a 5% discount was also offered to retail investors on price bid.
With this disinvestment, the Governemnt of India share in REC will come down to 60.64%.
At the end of the day with total subscription of Rs 7621 crore, the issue stood oversubscribed by 553%, the highest ever for an OFS.
The investor enthusiasm for the issue is borne out by the fact that the indicative price for retail was Rs 325.10 and for institutions Rs 324.73 both above the previous day (7/4/2015) closing price of Rs 321.65 and floor price of Rs 315. Seldom, if ever, has such an upward spiral been registered by an OFS.
The highlight of the issue has been the overwhelming retail investor participation, a record 902% oversubscription amounting to Rs 2887 crore . If we add retail bids through Mutual Funds then with Rs 528 crores, the total amount subscribed by retail investors adds up to Rs 3415. Significantly against a discount of 5.3% to the last traded price for the previous REC transaction in the 2010 FPO, the discount this time was only 2.1%
The OFS has been equally strongly endorsed by the institutional investors. At Rs. 4734 crore, it was oversubscribed by 466%, once again the highest ever for an OFS.
The FIIs participation stood at impressive Rs 1692 crore or 20.71% of the subscribed amount.
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