Hit by the poor response to its IPO, Wockhardt Hospitals has withdrawn its public issue. The company that came with its public offering to initially raise Rs 777 crore at a price band of Rs 280 to 310 is the largest issue in history to have been withdrawn due to undersubscription. The company has further clarified that it will complete all the refunds to investors who had applied for the issue within 15 days of the closing date, ie Febuary 7, 2008. The company first revised its offer price between Rs 225 and 260 due to low market enthusiasm. With this step proving inefffective, the company went ahead to increase its offer period by two days. Even this could not hold it any further and by 5 pm on Wednesday, the issue managed a subscription level of just 20 per cent.For an issue to be successful, the minimum subscription required is 90 per cent. “It is too early to talk on what will be the future course of action for Wockhardt. The company will decide over the next few days,” said an investment banker to the issue. In 2007, three issues were cancelled or withdrawn due to undersubscription. These were Tubeknit Fashions, Ammana Bio Pharma and SVPCL. The sizes of the issues were Rs Rs 46.2 crore, Rs 20.1 crore and Rs 34.5 crore respectively. Against this, the Wockhardt issue was a major one that aimed to raise a revised figure of Rs 652 crore. With the latest development, the company’s plans to expand and pay off its debt have suffered a setback. The company had proposed to invest the money raised in its 16 planned hospitals, which would take its total bed capacity from the present 1,374 to 4,793. The company also planned to pay off its short-term debt, amounting to Rs 195 crore, of its total secured and unsecured loans of Rs 339 crore as on June 2007.
