Mumbai, Dec 16: Cairn India's initial public offering (IPO) managed to scrape through late last evening after it extended the deadline for bids as some institutions withdrew their bids, according to some bankers.
The IPO, the bankers point out, attracted more bids at the bottom end of the price band of Rs 160-190 per share, suggesting that the Cairn may eventually price the issue at the lower end.
In effect, IPO at the lower end would help raise USD 1.18 billion, valuing the company at USD 6.32 billion instead of USD 7.5 billion at the top end.
Initially, the IPO was bid 1.3 times when it opened for subscription on Monday, but perceptions that the issue was steeply priced and uncertainty over the construction of pipelines to move oil from its fields dampened sentiment.
It managed to get the subscription after it extended the deadline for accepting bids in two stages, bankers said.
Initially, the IPO of the Indian unit of Britain's Cairn Energy Plc was targeted to be India's biggest ever, raising up to USD 1.4 billion.
Many analysts had made a ''subscribe'' recommendation, but concerns remained. ''Uncertainty continues over the marketability of the crude, as no long-term contract has yet been signed with any downstream consumer,'' brokerage Prabhudas Lilladher said in a note to its clients.
Cairn wants Mangalore Refinery and Petrochemicals Ltd (MRPL) which has a 30 percent stake in its Rajasthan block, to lay the pipeline to carry crude. However, MRPL, a subsidiairy of the state-owned Oil and Natural Gas Corporation (ONGC) has set a precondition that the oil be sold to it at a discount.
In a pre-IPO placement, Cairn India had raised USD 822 million last month by selling 12 percent, mainly to Malaysia's state-run oil firm Petronas.
The IPO was managed by ABN AMRO Rothschild, Merrill Lynch and Morgan Stanley.