Creative Eye to relaunch IPO

MUMBAI, JULY 10: Perhaps for the first time in recent history, a company hasdecided to relaunch its IPO. Creative Eye, whose book-building...

MUMBAI, JULY 10: Perhaps for the first time in recent history, a company hasdecided to relaunch its IPO. Creative Eye, whose book-building part closedon July 6 has decided to re-launch its IPO at a later date. The decision torelaunch the float comes even after the book-built portion of the issue wasoversubscribed by 1.25 times.

The company claims that it wants to relaunch the issue at an8220;investor-friendly8221; price, clearly implying that the price would be lowerthan the last floor price of Rs 225 per share.

The relaunch decision coincides with the opening of yet another IPO from theentertainment sector. Subhash Ghai8217;s Mukta Arts book-building portion openedon Monday.

Through its maiden public offering, Creative Eye had offered 25,02,400shares of Rs 10 each at a floor price of Rs 225. However, after the closureof the book-building portion, according to the company, it has decided torespect the investor sentiment and after consulting the book-running leadmanagers, has decided to relaunch the issue. HSBC Securities amp; CapitalMarkets India was the book-running lead manager to the issue.

According to Crative Eye managing director Dhiraj Kumar, though the companyrests on strong fundamentals, 8220;We thought that it would not be a veryhealthy sign in case the shares list at a discount to the offer price. So,after consulting the merchant bankers and also a number of big investorsthose who had bid in the issue, we have decided to re-launch the issue.8221;According to the company release, the decision has been arrived at afterlooking into the composition of the book and the feedback received from bothinstitutional and non-institutional investors. According to Kumar, theinstitutional investors who had bid in the book-building part, have allwelcomed the decision. A total of 18,76,800 shares were offered through thebook-building route.

With the latest move, the fixed price portion, which was slated to open onJuly 20, stands cancelled.

According to merchant bankers, re-launch of the issue is permissible underthe present law, provided the retail fixed price portion is not open. Butthe company has to again file with Sebi a fresh prospectus and the nextround of book-building could take anywhere between 30 to 60 days or more tostart, say merchant bankers.