LIC goes all guns blazing for NMDC shares

12-Mar-2010

THE Life Insurance Corporation (LIC) may end up underwriting NMDC's follow-on public offering (FPO), unless foreign institutional investors (FIIs) turn up in hordes on the last day of the issue on Friday, like they did in the Rural Electrification Corp's FPO.

A government official confirmed that LIC was the largest bidder till Thursday, but declined to give details. On Thursday, the 33.2-crore NMDC share issue was subscribed 80%, but bulk of the bids came from LIC, and that, too, at the floor price of Rs 300. Participation by FIIs, high net worth individuals (HNIs) and retail investors was negligible, while domestic mutual funds have not bid for a single share so far.

According to data on NSE website, domestic financial institutions have bid for 25.40 crore shares, against the available 16.52 crore reserved for qualified institutional buyers (QIBs). FIIs and HNIs have bid for a little over 3 lakh shares each. Interestingly, the response from retail investors has been better, with bids for over 33 lakh shares received in this category. Shares in NMDC fell 5% on Thursday to close at Rs 360. With this, the stock has declined 26% over the past one month.

Source : www.insuremagic.com