India’s largest gold loan company Muthoot Finance had a modest listing gain opening 2.8 per cent above its issue price of Rs 175 on its debut at the BSE in a firm Mumbai market on Friday. The stock hit a high of Rs 198 before dropping below the issue price and was quoting at Rs 176 per share in the first hour of trade, valuing the company at Rs 6,547 crore or $1.5 billion.
At the rival NSE, Muthoot had a better opening price providing listing gain of 12.3 per cent before dropping to trade in the Rs 174-176 range or around the issue price.
The not-so-great debut of Muthoot also had some impact on one of its key competitors in the market, Manappuram General Finance. Manappuram scrip was down 3.45 per cent in the first hour of trade.
This can be partly due to softening of bullion prices over the past few trading sessions. While silver has gone into a sharp correction mode after an unsustainable fast-paced rise, gold is also trading below $1,500-an-ounce mark.
Muthoot, backed by big investors including the world’s largest sovereign wealth fund Abu Dhabi Investment Authority besides private equity firms such as Matrix Partners, Kotak Private Equity and Baring India Private Equity Fund, had a blockbuster issue having been oversubscribed 24 times.
This was led by the strong demand from institutional investors and HNIs, even as retail investors also fully subscribed to shares which were reserved for them. The strong response from investors makes it one of the best primary market issues to hit the local market in recent times, in terms of oversubscription figures. Muthoot intends to use the issue proceeds to augment its capital base and meet future capital requirements for funding of loans.
At the rival NSE, Muthoot had a better opening price providing listing gain of 12.3 per cent before dropping to trade in the Rs 174-176 range or around the issue price.
The not-so-great debut of Muthoot also had some impact on one of its key competitors in the market, Manappuram General Finance. Manappuram scrip was down 3.45 per cent in the first hour of trade.
This can be partly due to softening of bullion prices over the past few trading sessions. While silver has gone into a sharp correction mode after an unsustainable fast-paced rise, gold is also trading below $1,500-an-ounce mark.
Muthoot, backed by big investors including the world’s largest sovereign wealth fund Abu Dhabi Investment Authority besides private equity firms such as Matrix Partners, Kotak Private Equity and Baring India Private Equity Fund, had a blockbuster issue having been oversubscribed 24 times.
