Primary markets are having a hard time. Wockhardt Hospital withdrew its IPO yesterday due to poor response. It was highly priced compared to its peers. The next victim to fall prey is Emaar MGF. The company has withdrawn its IPO too, reports CNBC-TV18.
Emaar MGF plans to consider other funding options like private placement, PE at SPV level. They will refund IPO money in the next 10-15 days.
Low debt-equity ratio is an advantage for the company and IPO withdrawal is not going to impact company's projects. 'Enough funding' is available with the company.
Emaar MGF Land, a joint venture between Emaar Properties of Dubai and MGF Development of India, had come out with a public issue of 102,570,623 equity shares at a revised price band of Rs 530-630. The company was planning to raise around Rs 5436-6462 crore through this issue.
Negative sentiment across the market had compelled the company to rethink about their price band. It revised to Rs 540-630 from earlier price band of Rs 610-690 and then changed to Rs 530-630. The issue also extended by 5 days till February 11. That did not help the issue to get full subscription after seeing today’s negative sentiment and withdrawal of Wockhardt Hospital also added to sentiment.
Public issue got subscribed nearly 0.84 times in the morning but suddenly QIBs and HNIs have started withdrawing their bids and the subscription dropped from 0.84 times to 0.43 times, which given the red signal to the company. Ultimately the company has withdrawn it IPO and plans to re enter primary market again when the market sentiment would get improved.
The issue proceeds was planned for part payment towards the acquisition of land and land development rights and related approvals for its ongoing and planned projects, the development and construction costs for project Palm Drive in Gurgaon and repayment of loans.
The global co-ordinators and book running lead managers to the issue were Enam Securities Private Limited and DSP Merrill Lynch Limited. The book running lead managers were Citigroup Global Markets India Private Limited, Goldman Sachs (India) Securities Private Limited, HSBC Securities and Capital Markets (India) Private Limited, J.P. Morgan India Private Limited, Kotak Mahindra Capital Company Limited and ICICI Securities Limited.
Source: Moneycontrol.com
Friday, February 8, 2008
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