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Jet offer roars in takeoff

Mumbai, Feb. 18: Jet Airways' initial public offering (IPO) was sold out within minutes today as investors scrambled for a slice of the first major airline stock in the country.

The flotation was oversubscribed 4.4 times and investment bankers said most bids came in at the upper limit of the Rs 950-1125 price band. 'There were more than 75 million bids received today,' they added.

The oversubscription was 1.5 times in 10 minutes, with most investors ready to pay Rs 1125, a banker said. That the offer was oversold so quickly cheered up investment bankers, who were under fire from some quarters of the market for having priced the stock too high. At the lower end of the range (Rs 950), Jet will raise Rs 1640 crore.

The amazing IPO takeoff fired up Jet officials who just completed the roadshows in the US and were headed for London, Edinburgh and Frankfurt to build up the campaign. The bids from the US and Europe will arrive by Monday.

'It's a good blend of both,' sources said, referring to the interest in the Jet stock among domestic and local institutions. Retail and high net worth individuals are expected to make a beeline in the last few days of the issue.

Sixty per cent of the shares are reserved for institutions, 15 per cent for high net worth individuals and 25 per cent for small investors; 12 lakh shares are meant for Jet employees.

The issue will set the pace for rivals Air Sahara and Air Deccan to come out with their initial public offers in the near future. It also heralds a season of maiden offers, expected to mop up close to Rs 40,000 crore over 12 months.

Companies raised over Rs 25,000 crore from the primary market in the last financial year with the government taking home much of the amount through stake sales in ONGC, Gail, IPCL, CMC and Dredging Corp.

Jet Airways, founded by one-time London travel agent Naresh Goyal, has grown rapidly since it started flying in 1993; it now flies more passengers than Indian Airlines. Foreign brokerages have forecast a growth of 18 per cent for Jet's earnings between the financial years 2004-05 and 2006-07. Domestic carriers are betting that many upper-class train passengers will switch to air travel, considering the narrowing difference in the fares of the two.

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