Samvardhana Motherson Finance scrapped its initial public offering of shares to raise about $311 million due to poor response amid souring foreign investor sentiment over uncertainty about a proposal to tax portfolio investments.
The poor response to the offering, which would have been the biggest so far this year, is expected to dim the outlook for upcoming share sales including the Indian government's plans to sell some of its shares in state-run companies.
The Samvardhana IPO was covered only about 23% of the total book size by 5 pm on Friday, the last day of bidding, according to stock exchange data. It was launched on Wednesday.
'The response was mainly hit by worries about GAAR. Foreign investors are not in a mood to commit money in the absence of any clarity on that,' a source with direct knowledge said.
Samvardhana, which makes and designs auto components, said in a statement it was withdrawing the IPO due to weak equity market conditions and currency volatility. The company was selling shares in the price band of 113-118 rupees a share to raise Rs16.65 billion ($311 million).
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The poor response to the offering, which would have been the biggest so far this year, is expected to dim the outlook for upcoming share sales including the Indian government's plans to sell some of its shares in state-run companies.
The Samvardhana IPO was covered only about 23% of the total book size by 5 pm on Friday, the last day of bidding, according to stock exchange data. It was launched on Wednesday.
'The response was mainly hit by worries about GAAR. Foreign investors are not in a mood to commit money in the absence of any clarity on that,' a source with direct knowledge said.
Samvardhana, which makes and designs auto components, said in a statement it was withdrawing the IPO due to weak equity market conditions and currency volatility. The company was selling shares in the price band of 113-118 rupees a share to raise Rs16.65 billion ($311 million).
....more info