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Retail and iinstitutional investors gave a thumbs up to the Reliance Petroleum IPO, which was oversubscribed 52.4 times on Thursday.
Bankers to the issue said this was the highest ever order book for any offering in India's capital market history. The demand for the $6 billion IPO from Reliance Industries refinery subsidiary was over Rs 147,000 crore in its order book late, bankers said.
This is double that of Oil and Natural Gas Corp (ONGC) IPO which garnered over Rs 73,000 crore.
"This demand signals the faith in the Mukesh Ambani leadership and the huge appetite for quality Indian paper even with markets at record levels," a banker to the issue said, on condition of anonymity.
It is also Reliance Industries' first offering post-demerger, after the group was split into five companies February this year, following a family feud between the Ambani brothers.
The oversubscription figure is likely to rise as the market regulator Sebi has allowed brokers across the country to punch applications into computer networks of the major exchanges till 9 pm Thursday IST.
The offering opened strong, being oversubscribed 1.4 times within 10 minutes of the opening on April 13. The qualified institutional buyer (QIB) portion was oversubscribed 55 times and high networth individual portion 17 times.
The retail investor portion was oversubscribed over 10 times.
The company, headed by Mukesh Ambani, said proceeds will be used to part-finance the Rs 27,000 crore Greenfield export refinery project in Jamnagar, located in Gujarat.
"Our proposed refinery and polypropylene plant will be located adjacent to the existing refinery and petrochemicals complex of Reliance Industries," the red herring prospectus filed with the regulator said.
The total offering is for 135 crore equity shares, including a
promoter's contribution of 90 crore equity shares.
The net offering to the public is for 450 million shares, with a price band of Rs 57-62.
The share sale is managed by DSP Merrill Lynch and JM Morgan Stanley. State Bank of India, Citigroup Inc., ICICI Securities Ltd. and six other banks will help sell the shares.
Sebi this week cleared US oil major Chevron Corp. as a co-promoter of Reliance Petroleum company. Chevron Corp. had earlier said it would pick up a 5 per cent stake in Reliance Petroleum, with an option to raise its holding to 29 per cent.
The export oriented project is likely to go on stream by December 2008. It will have a capacity to process 5,80,000 barrels per day making it the sixth largest refinery in the world. As a part of this project, RPL is also setting up a 900,000 tonne per annum polypropylene plant.