Emaar's Indian IPO stalled

IPO DELAY: Choppy market conditions hamper initial public offering launch for Emaar's Indian joint venture. (Getty Images)

An Indian joint venture of Dubai's Emaar Properties on Wednesday delayed the close of its initial public (IPO) offer until February 11 and cut its price for a second time, reflecting turbulent global markets.

The IPO for realty firm Emaar MGF Land Ltd, which was scheduled to close on Wednesday, had received 76.6 million bids, or 75% of the issue of 102.57 million shares, mostly at the lower end of the price band, data from the National Stock Exchange showed.

The company first cut the offer price range on the eve of the opening on February 1 because of volatile market conditions.

The price range, initially set at 610-690 rupees ($15.4-$17.5) per share, was cut at that time to 540-630 rupees, reducing the maximum it could raise to $1.64 billion, down from $1.8 billion.

On Wednesday, it reduced the lower end to 530 rupees.

"This marginal revision in the price band is in conformity with the Securities and Exchange Board of India (market regulator) guidelines on extension of the bidding period," Emaar said in a statement.

Earlier, a banking source with direct knowledge of the issue told newswire Reuters the decision was prompted by depressed markets. India's benchmark index ended down 2.8%.

"Today was the wrong day to close the IPO with most markets in Asia down," the banker said.

In contrast, Reliance Power's $3 billion issue just a few weeks back was lapped up by investors in one minute.

Reliance Power, a part of India's Anil Dhirubhai Ambani Group, attracted bids worth $190 billion and priced its offer at the higher end of its price band, at 450 rupees a share.

It will be listed on India's stock exchanges next Monday.

After a five-year bull run in the Indian stock market, Indian companies were forecast to raise up to $15.8 billion from new listings this year, nearly double the record $8.3 billion raised in 2007, according to Thomson Financial data.

But investor sentiment has wilted as the main BSE index recorded a 14.5% fall from its life high of 21,206.77 points struck on January 10.

Other IPOs have also taken a hit.

Wockhardt Hospitals Ltd, which extended its IPO by two days till February 7, had received bids for only 10% of its 25.1 million share issue on Wednesday.

IRB Infrastructure Developers Ltd on Wednesday priced its offer of 51 million shares at 185 rupees a share, the lower end of its price band. The offer was subscribed 4.3 times.

But India is still better off than other markets. A total of 21 IPOs globally, worth a combined $6.3 billion, were withdrawn in January due to the volatile markets, Thomson Financial said. (Reuters)

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