SMN Power public offer garners RO32m

16/10/2011 00:00 AST

SMN Power Holdings’ initial public offering (IPO), which closed subscription on October 10, has raised approximately RO32.5 million from institutional and individual investors.

However, this is a preliminary estimate and the final collection figure will be known only tomorrow, when all banks inform the issue manager on total subscription.

“We are looking at 1.3 times subscription. It may go up slightly, when the final figures are known tomorrow,” said a reliable source, on condition of anonymity. According to the source, collecting banks have seven days’ time to inform the final collection figures to the issue manager. The three collecting banks were BankMuscat, National Bank of Oman and Oman Arab Bank.

BankMuscat was also the issue manager and financial advisor for SMN Power.

Sources added that a major chunk of the share offer was subscribed by institutional investors, and retail investors’ participation was limited to a minor portion of the total offer. As much as 60 per cent of the offer or 4,192,348 shares were reserved for small investors who applied for a maximum of 5,000 shares.

And the remaining 40 per cent of the share offer was for those who apply for more than 5,100 shares. It appears that the unsubscribed portion reserved for small investors will be allotted to institutions, who have applied for more than their quota.

Listing on October 25

Sources said the SMN Power will finalise allotment before the stipulated time. “The allotment will be completed by next week.” According to the prospectus, allotment of shares to applicants will be on October 22, and the issue managers will dispatch refund and allotment notice on the following day.

The shares will be listed on the Muscat Securities Market (MSM) on October 25, in coordination with the bourse authorities.

The company’s promoters offered a total of 6,987,246 shares to the investing public at an offer price of RO3.520 per share — which included a premium of RO2.5 and an issue expense of 20 baisas.

Responding to the over all investor response to the issue, sources said that considering the sluggish trend across the world, the share offer has received a positive response, which is a testimony to the confidence of investors in the company.

“We have seen large companies shelving off their initial public offerings due to weak market sentiment.”

The company’s prospectus projected a dividend per share of 193 baisas for 2011, which will go to 440 basias in 2012. Similarly, the projected net income per share is at 189 basias per share in 2011 and 313 per share in 2012.

SMN Power Holding is a joint venture between International Power (via its indirectly wholly-owned subsidiary Kahrabel), Mubadala Development Company and Oman’s National Trading.

Times of Oman