Business | Markets
Emaar's India unit withdraws IPO
Emaar MGF Land withdrew its initial public offering on Friday, becoming the second Indian company in 24 hours to abandon an IPO and adding more gloom to a market that has fallen 17 per cent in a month.
- Reuters
- Published: 01:04 February 9, 2008
Mumbai: Emaar MGF Land withdrew its initial public offering on Friday, becoming the second Indian company in 24 hours to abandon an IPO and adding more gloom to a market that has fallen 17 per cent in a month.
The Indian joint venture of Emaar Properties, which aimed to raise up to $1.64 billion, pulled out after cutting its price twice and extending its IPO by three days to February 11 in a volatile market.
"The company decided to take this step as a result of the prevailing adverse market sentiments, fuelled by renewed indications of a US recession and global meltdown," it said in a statement. Similar concerns have caused several Asian firms to withdraw IPOs.
Trend
Twenty-one IPOs worldwide, worth a combined $6.3 billion, were pulled in January due to volatile markets, according to Thomson Financial.
But India bucked the trend when its biggest ever offer, a $3 billion IPO from Reliance Power, was sold in a minute that month and subscribed 73 times before it closed.
The price range of the 10.4 per cent stake in Emaar MGF bein goffered was initially set at Rs610-Rs690 ($15.5-$17.5) before first being cut to Rs540-Rs630 then trimmed again to Rs530-Rs630.
Emaar's withdrawal follows Thursday's decision by healthcare services provider Wockhardt Hospitals to cancel its IPO after it received subscriptions for only one fifth of the offering.
Vallabh Bhanshali, chairman of Enam Securities, a global coordinator for the Emaar MGF issue, told a television channel there was a good chance the IPO would have been fully subscribed.
"We thought it best that the issue was withdrawn even if there was a very good prospect of seeing the issue through," he said.
Emaar MGF said it was worried how the stock would trade after listing but would return to the market in better days.
Bhanshali said two failed IPOs did not signal total gloom. "I would not like to conclude that the world has gone one way because a couple of issues have had to withdraw," he said.
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