Emmar MGF withdraws IPO, becomes second casualty

Mumbai, Feb 8 (UNI) Real estate major Emmar MGF today withdrew its initital public offer (IPO) from the capital market, becoming the second casualty as the Indian bourses sank deeper on weak global cues and prevailing worries over the possible recession in US economy.

Emaar MGF's IPO failed to sustain the adverse pressure in the market and stepped back on account of miniscule demand of its shares, despite extending the offer closing date.

A day before, Wockhardt withdrew its IPO due to the same reason.

Following Wockhardt's move, the real estate major decided to postpone the issue despite receiving applications worth Rs 5,779.36 crore in light of discouraging market dynamics. The IPO was subscribed only 0.83 times since its offer opened four days back. ''The company decided to take this step as a result of the prevailing adverse market sentiments, fuelled by renewed indications of a US recession and global meltdown,'' the company said today.

Earlier, in order to provide a cushion for the bumpy jerks, the company had lowered the price band of IPO twice and extended the offer closing date till February 11 but it failed to dare for further trades. The price band was revised from Rs 540 to Rs 630 per share to Rs 530 to Rs 630 per share.

Bombay Stock Exchange (BSE) former president Dina Mehta observed that primary markets were passing through hard times.

Wockhardt withdrew due to poor response as it was highly priced as compared to its peers followed by Emaar MGF, which taken a back on the same ground.

However, the company would look for other options like private placement and private equity deals at the special purpose vehicle (SPV) level. They will refund IPO money in the next 10-15 days.

The company expects to return to the market at a later date when sentiment and liquidity conditions are better.

UNI PP/AR SSS AG1959