Indian Energy Exchange IPO Hits Regulatory Glitch
Indian Energy Exchange Ltd.’s fundraise from anchor investors declined by more than half to Rs 130 crore after India’s largest power trading platform revised the pre-IPO allotment amid confusion over foreign investment norms.
Some of the custodians of foreign investors objected to the interpretation of regulatory norms regarding their investment, Satyanarayan Goel, managing director and chief executive officer at IEX, told BloombergQuint over the phone. IEX is awaiting clarification from the Securities and Exchange Board of India, Goel said.
Anchor investors are large institutions that are allotted shares ahead of an initial public offering to boost demand. Their share is part of the portion set aside for qualified institutional buyers. In case of IEX, half of its Rs 1,000-crore initial public offering was set aside for QIBs. And 60 percent of the QIB share was to be allotted to anchor investors.
IEX allocated about 18.20 lakh shares at Rs 1,650 each to anchor investors to raise Rs 300 crore on October 6, its exchange filing showed. Due to the regulatory confusion, the company revised the allocation to about 7.9 lakh shares at Rs 1,650 each totalling Rs 130 crore, according to another notification to the exchanges.
The company shifted Rs 170 crore from anchor allocation to QIBs, whose share now stands at Rs 370 crore, Goel said.
The power exchange’s IPO was subscribed 2.27 times by 7 p.m. on the final day of the issue. Its shareholders, including private equity investors and Tata Power Ltd., are looking to raise Rs 1,000 crore by selling 20 percent stake. “We are confident the initial public offering will be oversubscribed,” Goel said.
Watch the full interview with the MD and CEO of IEX here.