Hindustan Construction Company’s subsidiary Lavasa Corporation has decided to raise funds from the primary market through the launch of an IPO worth ₹750 crore.

The company has filed a draft red-herring prospectus with the Securities and Exchange Board of India for the same on Tuesday and informed the exchanges. However, the issue is subject to receipt of requisite regulatory approvals, market conditions and other considerations, it added.

The news had the company scrip showing a spurt in volumes by over 5.25 times and touch its new 52-week high value of ₹49. It ended the day at ₹48.45, up ₹1.75 or 3.75 per cent, on the BSE on Tuesday.

The price band, the retail discount and the minimum bid lot size of the issue will be decided by the company in consultation with the Book Running Lead Managers of the issue comprising Axis Capital, Kotak Mahindra Capital Company and ICICI Securities and will be announced at least five working days prior to the issue opening date.

QIB to get 75% At least 75 per cent of the issue shall be allotted on a proportionate basis to Qualified Institutional Buyers (QIBs) and the company may allocate up to 30 per cent of the QIB category to anchor investors on a discretionary basis, according to a company statement.

Further, 5 per cent of the QIB portion (excluding anchor investor portion) shall be available for allocation on a proportionate basis to mutual funds only, and the remainder of the QIB portion shall be available for allocation on a proportionate basis to all QIB bidders (other than anchor investors), including mutual funds.

Also, not more than 15 per cent of the issue will be available for allocation on a proportionate basis to non-institutional bidders and not more than 10 per cent of the issue shall be available for allocation on a proportionate basis to retail individual bidders.

The equity shares offered through the issue are proposed to be listed on the BSE and the NSE.

According to market watchers, the Lavasa IPO could usher in a renewal of the IPO market which has dried up in the last three years owing to poor market sentiments.

Earlier plan This is the company’s second attempt at an IPO as HCC had planned to raise ₹2,000 crore in 2010 by offering to sell 10 per cent promoter’s stake through the Lavasa IPO.

However, the issue was shelved owing to weak market sentiment. HCC holds 65 per cent stake in Lavasa, while Gautam Thapar-controlled Avantha Group is the second-largest shareholder with 16 per cent stake. Other shareholders are Venkateshwara Hatcheries (about 13 per cent) and Pune-based investor Vinay Maniar (6 per cent).

Lavasa, a planned hill city near Pune, envisages development of multiple towns spread over 25,000 acres, and 200 million square feet of commercial, institutional, and residential space.

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