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After ONGC, Wipro's share auction raises half its target

The share sale came two weeks after state-run Oil and Natural Gas Corp's chaotic $2.6 billion offering fell short of the government's target to sell a 5 percent stake in the company as part of its divestment programme.

Reuters

15 Mar 09:18 am IST

     

A trust controlled by Wipro's billionaire founder Azim Premji raised $150 million in an auction of the Indian software company's shares, roughly half of the target, clouding the outlook for a newly approved stock auction process.

Wipro, India's third-largest software services exporter, is the first private sector company to tap the share auction route that was approved in January and was aimed at avoiding expensive roadshows and saving time on secondary share sales.

The share sale came two weeks after state-run Oil and Natural Gas Corp's chaotic $2.6 billion offering fell short of the government's target to sell a 5 percent stake in the company as part of its divestment programme.

"It's shocking that a $300 million book for a company like Wipro doesn't even get fully covered. It's less to do with investor appetite and more to do with the process itself," said a senior equity banker at a US-based bank in Mumbai.

Bangalore-based Wipro , which is also listed in New York, sold 17.8 million company shares for about Rs 750 crore in the auction to fund its non-profit arm, said a statement from the founders' trust late on Wednesday.

Up to 35 million Wipro shares were offered in the auction that could have raised roughly $300 million at the floor price of Rs 418 a share, which was a discount of 4.5 percent on its close price of Monday when the plan was announced.

A total of 24.8 million bids were received in the auction, the exchange data showed earlier. Many bids were rejected as their price was below the cutoff level, said a source with knowledge of the deal.

The floor price was disclosed after the close of the auction process.

"The duration of the auction process has to be increased and bids should be accepted overnight so that many overseas bidders can also participate," said the banker, declining to be named as he was not authorised to speak to the media.

Analysts said investor sentiment for the Wipro auction was....
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