Saturday, April 24, 2010

Jaypee Infratech IPO - Analysis, Subscription, Allotment, Listing

Jaypee Infratech, a part of Jaypee Group, is entering capital market with a public issue on April 29, 2010. It is aiming to raise a maximum of Rs 23.5 billion (USD 530 million). The company has fixed the price band for issue at Rs 102-117 a share and the issue will close on May 4. Retail investors will get shares at 5% discount to issue price. The shares will be listed on BSE and NSE.

The company is engaged in the development of the Yamuna Expressway, which is a 165-kilometre access-controlled six-lane concrete pavement expressway along the Yamuna river, with the potential to be widened to an eight-lane expressway, and related real estate projects. Jaypee Group incorporated this company on April 5, 2007 as a special purpose company to implement the concession. This concession also included the right to develop 25 million square metres (approximately 6,175 acres) of land along the Yamuna Expressway at five locations for residential, commercial, amusement, industrial and institutional purposes. The project is being developed at a cost of Rs 97.39 billion (USD 2 billion) and includes setting up townships at five locations along the highway.

The issue consists of fresh issue aggregating up to Rs 1650 crore and an offer for sale of 6 crore equity shares by Jaiprakash Associates (JAL). JAL owns 99.1% of equity shares of company. Proceeds raised from the fresh issue will be partially used for financing the Yamuna Expressway Project while money from offer for sale will be received by JAL.

The book running lead managers to the issue are Morgan Stanley India Company Private Limited, DSP Merrill Lynch Limited, Axis Bank Limited, Enam Securities Private Limited, ICICI Securities Limited, IDFC – SSKI Limited, JM Financial Consultants Private Limited, Kotak Mahindra Capital Company Limited and SBI Capital Markets Limited. Karvy Computershare Private Limited is the registrar.

ICRA has assigned the IPO Grade 3 indicating average fundamentals. CARE has assigned the CARE IPO Grade 3 indicating average fundamentals.

The IPO has not got a good response so far. It just managed to get fully subscribed. At the close of the IPO,
QII segment got subscribed by 1.6 times
NII segment got subscribed by 0.35 times
Retail segment got subscribed by 0.12 times
Shareholder reservation segment got subscribed by 0.04 times

Private-sector road builder Jaypee Infratech raised about $502 million after the deal was priced at the bottom of its 102 to 117 rupees a share range.

Click here to check if you have been alloted Jaypee shares!

Jaypee Infratech had a dismal listing. It ended 10% lower on its debut. The stock touched an intraday high of Rs 98.50 and an intraday low of Rs 90.00.

Watch out this blog for all the details on subscription, allotment and listing!


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