DLF IPO - FII, Domestic Investors

Even as financial institutions and foreign funds poured money for a slice of the DLF issue, India’s biggest realty firm just about managed to fill up the retail quota in the country’s biggest-ever IPO, which closed on Thursday.

Sources close to the issue said that with investment bankers extending the deadline(till 8.30 pm) for accepting subscription bids, all the categories were fully subscribed.

While on an overall basis, the Rs 9,000-crore issue was subscribed 3.5 times, the retail segment received a subscription of just 1.05 times. A banker to the issue told ET that most of the bids had come in at Rs 500, the lower end of the price band.

The qualified institutional buyers, which includes foreign funds (QIB) portion got subscribed by more than five times, the NII portion was subscribed 1.2 times. The real estate major had entered the capital market with an issue of 17.50 crore shares in the price band of Rs 500 to Rs 550.

The final numbers will be available only by Friday. But even if the retail segment remains undersubscribed, the issue will still get through as the guidelines allow the shortfall in the retail segment to be met by institutional investors, like it had happened in the case of Cairn India.

As the deadline was extended on the final day of bidding, names of many prominent financial institutions, domestic and foreign, were heard doing the rounds. According to sources, the QIB segment received more than $100-million bid each from prominent foreign institutional investors (FIIs) like Lehmann Brothers, JP Morgan, Deutsche, Nomura and the UAE-based Nakheel.

Domestic financial major and insurance behemoth LIC is also believed to have submitted a bid worth more than $100 million. Even GIC is believed to have put in a large bid.

Sources add that an European investor has also put in a bid of around $500 million, which is said to be one of the largest bids. There has been huge inflows through the participatory note route too, add sources. Also, as compared with initial expectations, Gulf-based investors have not bid aggressively. Investment bankers were initially expecting subscriptions of over 10 times.

When contacted Uday Kotak, vice-chairman and managing director, Kotak Mahindra Bank, said that he was delighted by the response to the issue in every category. Kotak Mahindra Capital Company is one of the book running lead managers to the issue