Maruti Udyog Ltd's initial public offering will hit the market on Thursday. On offer are 7.2 crore (72 million) shares of Rs 5 each with a reserve price of Rs 115 a share. The government is divesting a 25 per cent stake in the company through this offering.
Being done through a 100 per cent book-building route, the offering has attracted a lot of interest among institutional investors for whom there is a 60 per cent reservation.
With 15 per cent allocated for wholesale bidders applying for more than 1,100 shares, this segment is expected to attract the largest numbers.
Said a market dealer: "We can expect oversubscriptions to come from this segment." While 25 per cent has been reserved for retail investors, the market does not expect any substantial interest from this segment.
There is also slight uncertainty over the price of the scrip post-listing. According to an analyst, with such a large number of shares at the disposal of the qualified institutional buyers, there might not be any attraction for them to buy further in the market at the time of listing.
The expectations in the market chiefly stem from the fact that investors get the chance to hold shares in a well-known company as Suzuki.
The IPO advertisements have all stressed on the Suzuki factor in the management of the company. The bids for the issue are scheduled to open on June 12 even as the roadshows continue across various overseas locations to woo international investors. The issue closes on June 19.
The roadshows have already been conducted in Mumbai, Delhi, London, New York, Boston, Los Angeles and San Francisco and is now proceeding towards Singapore and Dubai.
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