Emaar MGF Land withdraws IPO

Subscribe to Oneindia News

Mumbai, Feb 8 (UNI) Emaar MGF Land became the second victim in the last two days of depressed secondary market conditions as it today withdrew its initial pubic offer (IPO) following poor response to the issue.

The company will now look at private placement and private equity deals at the special purpose vehicle (SPV) level.

Earlier, Wockhardt Hospitals yesterday withdrew its initial public offer (IPO) due to poor investor response.

Emaar MGF Land would refund the money to investors in 10 to 15 days. The Emaar MGF Land IPO was subscribed 0.83 times on its fourth day of issue on February 7. However, most investors might have pulled-out their bids today as indicated by the fall in subscription figures. As a result, the issue was subscribed just 0.43 times as of today, a leading merchant banker said.

The company had cut the price band of its initial public offer for the second time on Wednesday and also extended the date of closing of the issue to Monday, due to poor response to the issue. The price band was revised from Rs 540 to Rs 630 per share to Rs 530 to Rs.630 per share.

The price band for the issue was initially pegged at Rs 610 to 690 per equity share. The IPO had opened for subscription on February 4.

Real estate major Emaar MGF Land is a joint venture between Emaar Properties PJSC of Dubai and MGF of India. Emaar group holds 41.9 per cent stake in the JV while MGF holds 53.3 per cent stake.

The proceeds of the IPO were to be used for part payment towards the acquisition of land and land development rights and related approvals for its ongoing and planned projects; development and construction costs for project 'Palm Drive' in Gurgaon; and repayment of loans; and general corporate purposes (GCP).

The Bombay Stock Exchange former president Ms Dina Mehta said the primary markets are having a hard time. Wockhardt Hospital withdrew its IPO yesterday due to poor response.It was highly priced compared to its peers. The next victim to was Emaar MGF, which has withdrawn its IPO too.

Emaar MGF plans to consider other funding options like private placement, PE at SPV level. They will refund IPO money in the next 10-15 days. It it likely to enter the capital market at least in the next three months.

Low debt-equity ratio is an advantage for the company and IPO withdrawal is not going to impact the company's projects. 'Enough funding' is available with the company.

UCO Bank had planned follow on public offer of 9 crore shares before March 2008. But the bank deferred its public issue plan due to volatile markets, she added.

UNI AR OBB AG1823

Please Wait while comments are loading...