Retail portion was subscribed 3.6 times while the quota reserved for qualified institutional bidders (QIBs) got subscribed 3.8 times. However the high networth individual segment was subscribed only 2.67 times.
The Rs 4,633 crore IPO issue received bids for 432 crore shares, as against the issue size of 124.75 crore shares.
The first non-banking financial company (NBFC) IPO from the government comprises a fresh issue of up to 118.80 crore shares and an offer for sale (OFS) of 59.402 shares, are being sold in the price band of Rs 25-26 apiece.
On Friday, IRFC had raised Rs 1,390 crore from 31 anchor investors by allotting 53.46 crore equity shares at an upper price band of Rs 26 per share. For the first time, the state owned company has made provisions for allotment to anchor investors to help garner more value for the IPO.
While 35% of the issue is reserved for retail investors, the quota for QIBs is fixed at 50 per cent, and 15 per cent for non-individual investors.
IRFC has been funding 30‐45% of Indian Railways (IR)’s capex. Its primary business is financing the acquisition of rolling‐stock assets, leasing of railway infrastructure assets, and lending to other entities under the Ministry of Railways.
At the upper end of the price band of Rs 25‐26), the issue is valued at 1 times FY20 book value with an return on assets of 1.5% and an return on equity of 14.9%. Most of the analysts have recommended to subscribe to the IPO citing attractive valuations.
“With high visibility on balance‐sheet growth and no risk to asset quality, current valuations look attractive,” said Pradeep Agrawal, analyst, PhillipCapital. “Its strong balance sheet size of Rs 2.7 tn, with nil gross non-performing assets, low overheads, and IR’s huge capex needs bode well for its growth prospects.”
