Weak market conditions has forced auto parts maker Samvardhana Motherson Finance Ltd (SMFL) to defer its Rs 1,665 crore initial share sale,that remained under-subscribed on the last day today.
“In light of the weak equity market conditions and volatile currency movements,the company on the advice of the book running lead managers has decided to defer its proposed Initial Public Offering (IPO),” Samvardhana said in a statement.
The IPO opened for subscription on May 2,but the overall market conditions have bad since then and the benchmark Sensex has dropped nearly 500 points in the past three days,including a plunge of over 300 points today itself.
Samvardhana said it believes the continued equity market and currency volatility are not optimal conditions for listing the equity shares and good after market performance.
Samvardhana noted that the issue received significant interest from potential investors.
Before the issue opened for the public bidding,the company had already secured Rs 222 crore through allotment of shares to four anchor investors,including the Government of Singapore.
It had allocated over 1.93 crore equity shares to the anchor investors at a price of Rs 115 per share,raising Rs 222.03 crore.
SMFL had set a price band of Rs 113-118 for the initial share offer,that could have mopped up Rs 1,665 crore. This IPO would have been the largest private sector offer after JSW Energy mopped up about Rs 2,700 crore in December 2009.
Standard Chartered Securities India Ltd and J P Morgan India were the book running lead managers to the SMFL issue.
As per the data available on the National Stock Exchange,SMFL issue was subscribed just 23 per cent till 1700 hours today,the last day of the offer.
After the closing of the bidding period,the company said its selling shareholders and the bankers decided not to proceed with the issue.
The steps would be initiated for refund of the bid amounts received already,the bankers to the issue said.