Mumbai, Nov 22: The first-ever book-built issue in the Indian market is in trouble under the current depressed market conditions and with one of its co-lead managers already walking out of the issue. Market sources are expecting the bidding process to start only after a month. A meeting has been called on November 25 where Nirma, the book-runner, the co-lead managers and the co-managers will discuss the new strategy on how to handle the issue and when to float it. The book runner/lead manager, JM Financial Services Ltd, and issuer company Nirma were not available for comments.

According to the issue's co-managers, the company would never have received a price anywhere near its expectations in these market conditions considering that the current market price for Nirma was ruling at Rs 350. The investors were ready to bid at a price between Rs 225 and Rs 250, whereas the company was expecting the price to be in the range of Rs 325 and Rs 375. Though, according to another merchant banker who was also closely associated with the issue, the exact reaction cannot be guaged since the real bidding process never got off. But, they said that the investors have full confidence in the company and it is only the market conditions which are deterring them from coming forth with the issue. Enam Financial Services had already withdrawn as a syndicate member around the end of October or in the beginning of November. Sources at ENAM Financial Services Ltd refused to divulge the exact reason for withdrawing from the issue as a syndicate member on grounds of maintaining "confidentiality" with the company. But, according to the sources, Enam Fiancial Services Ltd was not comfortable with the price that the company was expecting in such market conditions.

According to the Sebi's current book-building guidelines, the syndicate members will enter into an underwriting agreement with the book-runner indicating the number of securities which they would subscribe at the pre-determined price.

The bidding process was supposed to start on November 24. In the meanwhile, the marketing operations were going on as per schedule.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.