Despite high volatility in the capital markets with the Sensex tanking 386 points, the IPO of state-run Rural Electrification Corporation (REC) got very good response on the last bidding day and was subscribed by 27.54 times. The IPO had already been oversubscribed by 15 times on Thursday. In the first fortnight of this month 3 IPOs — SVEC Constructions, Emaar MGF Land and Wockhardt Hospitals — were withdrawn.The issue has received bids for 430 crore shares against 15.61 crore shares on offer in the price band of Rs 90-105 per share. The IPO generated excellent response, as the QIB portion was subscribed 40 times, HNI 23 times and retail 5.69 times. The employee portion was also fully subscribed demonstrating the interest it has generated.The issue constitutes approximately 18.18 per cent of the fully diluted post-issue capital of REC. IL&FS Investsmart Securities, ICICI Securities and SBI Capital Markets are the book running lead managers for the issue.The company proposes to utilise the net proceeds from the issue to augment its capital base and improve its borrowing capacity to support the future growth in its assets. The IPO came as the government mandated REC and Power Finance Corporation (PFC) to mobilise funds for power projects.
