Abstract:
Wockhardt Hospitals, which specializes in different fields of health care decided to introduce IPO. It intended to use the money raised from the IPO for improvement of its various centers. However, it received a very lukewarm response from the investors due to which it had to withdraw the offer. The write up below gives information on the fact.
A private service provider in the healthcare sector, Wockhardt Hospitals, offers excellent services in the area of Cardiac surgery, orthopedics, cardiology, nephrology, neurology, urology, critical care, neurosurgery and specializes in offering surgery, which is "minimally invasive".
Wockhardt Hospitals IPO was launched but owing to lukewarm response from the investors, Wockhardt Hospitals decided to withdraw its initial public offer IPO (as of 8th February, 2008). The decision had to be taken likewise more so because of the bearish markets.
As per legal norms, a company, which withdraws its IPO is required to pay back the money of the investors in the event if there are 90% issues which have not been subscribed. The refund is required to be made within a span of 15 days.
Proposed Structure of Wockhardt Hospitals IPO, that was proposed:
As many as 4.9 million bids were registered by the Wockhardt Hospitals. This bidding was done for a total of 25.08 million of shares offered. It was anticipated that Wockhardt Hospitals IPO would raise as much as Rs 688 crore to Rs 762 crore, which would be eventually be made use of for the various projects planned by the Wockhardt Hospitals together with paying off certain debts as well as to fund several corporate expenditure.
- About 6.44% of the total shares were assigned to the QIB or the Qualified Institutional Buyers.
- Retail purchasers were assigned about 51.92% of the shares.
Reducing price band did not help:
Wockhardt Hospitals had revised their price band during the month of January. The Issue was open to subscription on the 31st of January, 2008. However, Wockhardt Hospitals did not receive any bid. Hence, subscriptions opened on 1st February, instead.
Even though, the date of opening the subscription was delayed, very few investors responded(" 0.1 times"). The closing date of the subscription was slated for February, 8th 2008 after delaying the closure date by 2 days.
On separate instances there were two other companies, who had withdrawn their IPO, namely, Bluplast Industries Ltd( a plastics firm) and Vigneshwara Exports Ltd ( a textile company).