India's Mahanagar Gas up to US$154m IPO fully covered on 1st day

[MUMBAI] India's Mahanagar Gas Ltd's up to US$154 million initial public offering was fully subscribed on Tuesday, signaling strong investor appetite in an overall optimistic stock market.

Rising optimism about earnings and the domestic economy have pushed shares nearly 18 per cent higher since hitting a near two-year low on Feb 29.

Retail and institutional investors placed bids for 17.81 million shares on the first day, or 1.03 times the 17.35 million shares on sale by the nation's third-biggest distributor of piped natural gas to vehicles and homes, according to stock exchange data.

The sale of the shares being offered in a price range of 380 rupees(S$7.55) to 421 rupees apiece is scheduled to close on Thursday.

Royal Dutch Shell's BG Asia unit and Indian state-run Gail - which owned about 45 per cent each of Mahanagar Gas before the IPO - are selling 12.5 per cent of their holdings each and will receive all the proceeds from the IPO.

On Monday, Mahanagar Gas sold 7.35 million shares at the upper limit of the price band at 421 rupees each to 25 cornerstone investors as part of its IPO, raising 3.09 billion rupees.

Mahanagar Gas, which supplies gas in financial capital Mumbai and the Thane suburb, plans to expand to the nearby Raigad district over the next five years.

REUTERS