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Journalism of Courage
LIC once again came to the rescue of the governments disinvestment programme and bought over 40 per cent stake in steel maker SAILs offer for sale (OFS) on Friday to help the offering scrape through with a 100.4 per cent subscription to the issue.
This is the fifth issue of the year where LIC has come to the rescue. In the previous instances it helped the governments sale to get completed in Hindustan Copper,NMDC,Rashtriya Chemicals and Fertilizers and Nalco.
Investment bankers related to the issue said that LIC would have bid anywhere between 40-50 per cent of the issue size while around 25 per cent came through foreign institutional investors (FIIs).
The issue went fine and managed to get fully subscribed. We knew that the markets were choppy and the share price had fallen by around 10 per cent in a week and so the offer size was brought down, said an investment banker who was involved with the issue.
The banker added that LIC,other domestic institutional investors and FIIs came in for what they wanted and the bids came in on expected lines.
The issue received bids for 24.134 crore shares as against the offering of 24.039 crore shares during the day and at an indicative price of Rs 63.07 it received interest worth Rs 1,522 crore as against the targeted Rs 1,514 crore. The issue was priced at Rs 63 which was at a discount of 1.4 per cent to Thursdays closing.
According to the data available with BSE of the total bids received,76.96 per cent were with zero per cent margins while 23.44 per cent bids were with 100 per cent margin.
After Fridays sale,the government holding in SAIL has gone down to 80 per cent. Shares of SAIL,which have been under pressure for more than a month now,closed at Rs 63.40,down 0.78 per cent.
