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Omaxe to launch Rs 1,500cr IPO

Omaxe Developers is planning to enter the capital market in the first quarter of 2007 to raise around Rs 1,500 crore through an initial public offering (IPO) of its equity shares. The company has filed its Draft Red Herring Prospectus with the Securities and Exchange Board of India (Sebi).

Omaxe has proposed to sell 1.78 crore equity shares. Of the total equity float,

• 1.75 crore equity shares are for public,
• 2.97 lakh shares are reserved for eligible employees of the company.
• Additionally, there will also be a green shoe option of 17.50 lakh equity shares.

The pricing of the issue would be determined through 100% book building process.

• A minimum of 60% of the net offer will be allocated to Qualified Institutional Buyers (QIBs),
• up to 30 % would be available for allocation on a proportionate basis to the retail bidders and
• 10% shall be available for allocation on a proportionate basis to high net worth individuals group.

According to market sources, the issue would be priced around Rs 850 per share. At this price, the valuation of the firm would be around Rs 13,500 crore.

With Omaxe developing projects in 30 cities in eight states and has large land banks, it is expected that Omaxe would get good valuation. The equity shares are proposed to be listed on BSE and NSE.

enigma

Recently, Omaxe Ltd (Omaxe largely operates in North India) has filed a red herring prospectus with the regulator for an initial public offering. The nearby sources (Involved in the deal) revealed that this IPO could raise money to the tune of Rs. 15 Billion ($339 million).

The sources also said that the company has decided to sell up to 11.2% of it;’s equity in the IPO, which will include a green shoe option of 1.75 million shares.

FYI: Omaxe has registered a net profit of Rs. 1.03 billion and operating income of Rs. 5.90 billion, the half yearly period till September 2006.

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Of the total equity float, up to 17,500,000 equity shares are for the public, while the balance 296,520 shares are reserved for eligible employees of the company. Additionally, there will also be a green shoe option of 1,750,000 equity shares. The issue would constitute 11.20 % of the fully diluted post-issue paid-p capital of the cmpany (assuming the green shoe option is exercised) and shall constitute 10.30% of the fully diluted post-issue paid-up capital of the Company (assuming the green shoe option is not exercised).

While the face value of the equity shares is Rs 10 each, the pricing of the issue is to be determined through 100% book building process. A minimum of 60% f the net offer to the public shall be allocated to Qualified Institutional Buyers (QIBs), up o 30% shall be available for allocation on a proportionate basis to the retail bidders and 10% shall be available for allocation on a proportionate basis to Non-Institutional Bidders.

The equity shares are proposed to be listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The copany has appointed DSP Merrill Lynch Ltd, Citigroup Global Markets India Pvt Ltd, & UBS Securities India Pvt Ltd as the gobal cordinators and joint book running lead managers. JM Morgan Stanley Pvt Ltd is the Book Running Lead Manager and ICICI Securities Ltd is the Co-Book Running Lead Manager.

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