NMDC issue gets 17% subscription on day 1

The follow-on public offer of mining major NMDC got subscribed 17 per cent on the first day of issue on Wednesday,with most of the bids coming from institutional buyers.

The follow-on public offer of mining major NMDC got subscribed 17 per cent on the first day of issue on Wednesday,with most of the bids coming from institutional buyers. The portion reserved for qualified institutional buyers (QIBs) was subscribed 33 per cent while non-institutional and retail investors stayed away from the issue.

Domestic institutions like LIC and SBI bought 5.57 crore shares worth Rs 1,600 crore (at the upper end of the price band). The issue received total bids for 5.71 crore shares or 17 per cent of the 33.22 crore shares on the block,as per the data available with the National Stock Exchange.

Most of the bid came in at the lower end of the price band at Rs 300 per share,NSE data showed. The government is divesting 8.38 per cent of its 98.38 per cent holding in the company. At the upper end of the price range,the follow on offer is valued at Rs 11,700 crore,whereas at the lower end it is worth Rs 9,900 crore.

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The navratna firm has reserved 35 per cent of the issue for retail buyers,whereas 50 per cent has been reserved for qualified institutional buyers,which include FIIs and mutual funds.

The company would offer a discount of 5 per cent to retail investors and its employees over the issue price,which will be decided after the completion of the FPO.

In the secondary market,the shares of NMDC today settled at Rs 380,marginally up by 0.62 per cent over previous close on the NSE.