Orders Worth €130 mln for Alumil at the BSE

Investors on the Bucharest Stock Exchange flooded the market with buy orders worth 130 million euros in order to grab as many shares as they could in the 8.4 million-euro initial public offering conducted by Alumil Rom Industry, in view of floatation.

The subscription to Alumil's IPO therefore reached 1,540%, with the number of shares subscribed amounting to 96.2 million compared with the 6.25 million offered.

This is a new record on the IPO market.

The previous record, held by Transelectrica, recorded a level of 646% subscription.

The shares, which account for 20% of the increased share capital, were offered at 4.6 RON/each.

"This is a big surprise to us, too.
 
Our estimates indicated an oversubscription by 6 to 8 times," says Apostolos Papadopoulos-Almeida, the head of the investor relations department of Alumil Greece, which handled the offering of the branch in Romania.

He added Alumil undertook to sell the shares at a price lower than the actual value to attract investors.
 
"We agreed to sell the shares for less than their real value at first to attract institutional investors.

We got very encouraging signals from the market before running this offering, but we kept this price," Papadopoulos-Almeida says.
 
He went on to say that he felt institutional investors had subscribed more than they actually wanted to buy in order to grab as many shares as possible.

The allocation method for the shares part of this offering (matching the number of shares subscribed), and the fact that brokers and investors were able to see how subscription was unfolding made many investors sign on for more shares than they actually wanted to buy, therefore boosting their chances of receiving an amount of shares as close to what they wanted as possible.

In addition, it is also possible that some investors subscribed without having all the money for the shares in their accounts, knowing they would not need it all when they have to pay for their allotment of shares.

Still, beyond the high level of interest in the offering conducted by the Greeks at Alumil, the high subscription level further demonstrates that investors on the Bucharest Stock Exchange, both Romanian and foreign, have significant amounts of cash available, and have trouble finding something worth buying.

The listed shares on the Bucharest Stock Exchange witnessed a rather calm trend yesterday, as the running of the Alumil IPO was not accompanied by exits from the listed shares on the market.
 
Most listed companies have exhausted most of their growth potential over the last few years, with only a handful of floatations operated over the same period.

Three companies attempted to float this year: Transelectrica, Blue Telecom and Alumil, and only two of them, that is Transelectrica and Alumil successfully concluded their IPOs.

Alumil's offering was brokered by Alpha Finance, the securities firm of Alpha Bank, and the distribution group included several brokerage companies on the Stock Exchange.

Source: reporter.gr