Manganese Ore India IPO fully subscribed: Exchange data

MUMBAI: State-run Manganese Ore India Ltd's initial public offering to raise up to $276 million was fully covered by mid-morning on Monday, the second day of the issue launch, data from the stock exchange showed.

The firm, which is the largest producer of manganese ore in India, plans to invest 7.7 billion rupees ($168 million) over the next five years to boost capacity at its existing mines by about 40 percent, its chairman said on Oct. 20.

The government is selling a 10 percent stake in the offer, while the state governments of Maharashtra and Madhya Pradesh are selling 5 percent each.

The IPO will close on Tuesday for institutional investors and on Wednesday for retail investors.

Edelweiss Capital, IDBI Capital Market Services and JP Morgan India Private are the book-running lead managers to the issue.

MOIL accounts for 50% of India’s total manganese ore production with an annual output of 1.1 million tonne. It’s a debt-free company with cash reserves of Rs 1,770 crore. For the half year ended September 30, the company’s turnover was at Rs 635 crore, compared to Rs 430 crore in the first half of previous fiscal. Profit after tax for the first half of this year stood at Rs 330 crore against Rs 201 crore in the yearago period.

For FY10, MOIL reported a 70% operating margin and a 52% net profit margin. MOIL’s revenues have grown at a compounded annual rate of 31.5% over FY06-FY 10 on the back of higher volumes and higher realisations. The company is one of the lowest cost producers of manganese ore, say analysts tracking the sector. The FPO of SCI is next in line after MOIL.