Saturday, May 1, 2010

SJVN IPO - Analysis, Subscription, Allotment, Listing

SJVN is a hydroelectric power generation company originally established as a joint venture between the Government and the state government of Himachal Pradesh to develop and operate the NJHPS. Based on information published by the CEA, the NJHPS is currently the largest operational hydroelectric power generation facility in India based on installed capacity, with an aggregate generation capacity of 1,500 MW, and is located on the Sutlej River in the state of Himachal Pradesh.

The government is offering 41.5 crore equity shares through the SJVN issue. The IPO opens on 29th April and will close on May 3. The purpose of the offer is to achieve the benefits of listing. The company will not receive any proceeds from the offer. Post issue, the government's holding in the hydropower generator will reduce to 64.47% from 74.5%.

Retail investors will get shares at a 5% discount to the offer price of Rs 23-26 per share. The offer comprises a net offer to the public of 411,650,000 equity shares and a reservation of 3,350,000 equity shares for purchase by eligible employees at the offer price.

For the period of nine months ended of December 2009, it has reported net profit of Rs 775.37 crore on total income of Rs 1,510 crore; it has debt of Rs 1,769.90 crore on its books.

The book running lead managers to the issue are JM Financial Consultants Pvt Ltd, IDFC Capital Ltd, IDBI Capital Market Services Ltd and SBI Capital Markets Ltd. Link Intime India Pvt Ltd is the registrar.

SJVN got a good response on the opening day of the IPO but before the close, got a very good response and was subscribed 6.6 times. At the close of the IPO,
QII segment got subscribed by 9 times
NII segment got subscribed by 3.4 times
Retail segment got subscribed by 3.1 times
Emloyee reservation segment got subscribed by 0.24 times

State power utility SJVN Ltd, which raised $240 million, said it set the price at the top end of the Rs 23-26 share range.

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

Surprisingly, SJVN closed below its issue price on listing day. It fell 3.65% to Rs 25.05 as against its issue price of Rs 26 on the Bombay Stock Exchange (BSE). The stock listed at Rs 27.10, had touched an intraday high of Rs 28 and an intraday low of Rs 24.15.

Watch out this blog for details on other IPOs!
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  1. Its show that people can still discern between junk and decent offerings. With a decent low double digit multiple and good dividend yield SJVN it makes sense for retail investors who get a 5% discount to subscribe to it. It certainly makes 10 times more sense than subscribing to the absolute junk that is being offering in the primary market

  2. Abhishek - Agreed. But more than retail investors, QII participation is significant in this IPO. Lets wait for the listing and see the response.

  3. When is SJVNL getting listed?

  4. SJVN is expected to list this week.