Emaar MGF cuts IPO price on dull response

Mumbai: Indian realty firm Emaar MGF Land Ltd on Wednesday cut its initial public offer price for a second time and extended it to February 11, a banking source said, making it the latest IPO to take a hit from turbulent global markets.

"The decision is to extend it until Monday," a banker with direct knowledge of the issue said yesterday.

"Today was the wrong day to close the IPO with most markets in Asia down," the banker said.

The IPO, scheduled to close yesterday, received 61.8 million bids, or 60 per cent of the issue of 102.57 million shares, mostly at the lower end of the price band, data from the National Stock Exchange showed.

The company, an Indian joint venture of Emaar Properties, first cut the offer price range on the eve of the opening on February 1 because of volatile market conditions.

The price range, initially set at Rs610-Dh690 ($15.4-$17.5) per share, was cut at that time to Rs540-Rs630, reducing the maximum it could raise to $1.64 billion, down from $1.8 billion.

Yesterday, it cut the price at the lower end to Rs530, the source said.

An Emaar MGF spokes-woman had no immediate comment.

In contrast, Reliance Power's $3 billion issue just a few weeks ago was lapped up by investors in one minute.

Reliance Power, a part of the Anil Dhirubhai Ambani Group, attracted bids worth $190 billion and priced its offer at the higher end of its price band, at Rs450 a share. It will be listed on India's stock exchanges on Monday.

After a five-year bull run in the Indian stock market, Indian companies were forecast to raise up to $15.8 billion from new listings this year, nearly double the record $8.3 billion raised in 2007, according to Thomson Fin-ancial data.

But investor sentiment has wilted as the Bombay Stock Exchange's main index recorded a 14.5 per cent fall from its record high of 21,206.77 points hit on January 10.

Other IPOs have also taken a hit.

Wockhardt Hospitals Ltd, which extended its IPO by two days till February 7, had received bids for only 10 per cent of its 25.1 million share issue yesterday.

IRB Infrastructure Dev-elopers Ltd yesterday priced its offer of 51 million shares at Rs185 a share, the lower end of its price band. The offer was subscribed 4.3 times.

January
21 IPOs withdrawn

A total of 21 global initial public offerings (IPOs) worth a combined $6.3 billion were withdrawn in January due to volatile markets, data from Thomson Financial showed on Monday.

The value of global equity and equity-related issues declined nine per cent from a year earlier to $39.7 billion in the month, with the value of IPOs dropping 16 percent, the data showed.

The value of the withdrawn issues was a three-fold increase from December's $2.1 billion.

After the Danish government delayed the $3 billion offering of Dong Energy, the share sale of billionaire Anil Ambani's Reliance Power Ltd on the Bombay exchange became the biggest new issue so far this year.

Reliance Power's $2.96 offering was managed by Kotak Mahindra Capital, UBS, ABN Amro, Deutsche Bank, Enam Securities, ICICI Securities, JM Financial and JPMorgan.

Following is a summary of the world's top five IPOs in January: