Religare Enterprises IPO

Abstract:

Religare Enterprises came out with the initial public offering in order to raise capital for financing its Retail Finance Business and for expanding the domestic branch network of the company. The company decided to sell its' 7,576,102 equity shares through this Initial Public Offering.

Religare Enterprises IPO refers to the initial public offering of Religare Enterprises, which was scheduled to open on 29th October, 2007 and close on 1st November, 2007. Religare Enterprises decided to come out with the initial public offering in order to raise capital that could be used in expanding the branch network of the company.

Details of the Initial Public Offering

The company decided to sell its' 7,576,102 equity shares through this Initial Public Offering. All these equity shares were each of rupees 10. Religare Enterprises fixed the price band for their shares as rupees 160 to rupees 185 per share. The company made it clear that this issue would constitute 10% of the post issue paid up capital.

The shares of Religare Enterprises were proposed to be listed on NSE(National Stock Exchange) and BSE( Bombay Stock Exchange). The company appointed Citigroup Global Markets India Private Limited and Enam Securities Private Limited as the BRLMs or Book Running Lead Managers for the IPO deal. Karvy Computershire Private Limited was appointed the Registrar for the Initial Public Offering.

Allocation of Shares

It was declared by the company that minimum 60% of the total equity shares would be offered to the QIBs or Qualified Institutional Bidders. 5% of these equity shares, to be allocated to Qualified Institutional Bidders, were reserved by the company for allocation to the mutual funds. Religare Enterprises decided that minimum 10% of the equity shares would be offered to institutional buyers, whereas, minimum 30% of the shares would be allocated to the individual buyers from the Retail Sector.

Reason behind the IPO

The main objective of Religare Enterprises IPO was raising capital that could be used in expanding the domestic branch network of the company. But, the company also planned to use the raised capital in financing its retail finance business. While taking the decision of Initial Public Offering, Religare Enterprises also thought of achieving the benefits of being listed on the stock exchanges.