Mumbai, July 31: The initial public offering (IPO) of GMR Infrastructure Ltd (GIL) was fully subscribed on its opening day, much to the relief of not only the entities associated with the issue but also primary market observers. The IPO, according to late evening figures, received bids for 6.03 crore shares against the issue size of 3.81 crore shares.

The issue was subscribed by 1.58 times ? a welcome break from the time when companies like Deccan Aviation had to struggle to get full subscription.

This had led the companies to adopt a conservative pricing mechanism for their fresh equity issues.

The GMR issue, at a price band of Rs 210-250, precedes that of Tech Mahindra, which will open for subscription tomorrow. “The success of GMR shows that there is still a demand for quality issues. However, investors are careful of lapping up stocks with aggressive valuations,” says an observer.

NSE data showed that of the bids received, domestic financial institutions (banks and insurance companies) bid for over 5.57 crore shares. Mutual funds bid for over 4.76 lakh shares.

Against the 2.26 crore shares reserved for qualified institutional buyers (QIBs), bids were received for 6.02 crore. Retail investors have bid for 17,525 shares.

GMR’s expertise is in developing power plants and road projects. It is now pursuing six road and two airport projects. The net proceeds from the issue would be used for investment in various infrastructure SPVs and repayment of unsecured loans.

“While GMR is strongly positioned in the power and road infrastructure segment, it is now foraying into the airport development business. However, the bulk of the revenues from some of the large and important projects will start accruing from 2008-09, which in our opinion, is a pretty long waiting period,” says a report from Mumbai-based Sushil Stockbroker Pvt Ltd.