HNIs lose out on Wabco OFS, some move Sebi

Mumbai: High net worth investors (HNIs) seeking to make quick returns on Wabco India’s offer for sale (OFS) last week were in for a rude shock when more than half a million shares were auctioned on Tuesday. HNIs, who sold them at a higher price last Thursday in hope of buying at a lower price through OFS, did not get the allotment.On March 24, Wabco India said that ZF International UK, one of the promoters, will sell 1.717 million shares or 9.05 per cent stake in Wabco India through an OFS on March 25-26 with a green shoe option of another 1.717 million shares or 9.05 per cent of the total equity. The floor price for the sale was fixed at Rs 5,450 per share.On March 25, Wabco India shares rallied almost 5 per cent from the opening price to touch a high of Rs 5,944.90. Sensing the arbitrage opportunity, some of the HNIs short sold a few lakh shares between Rs 5,700 and Rs 5,900 apiece, assuming that they can buy them through OFS at Rs 5,500-5,600 per share. However, to their surprise, a large bid came at over Rs 6,000 per share at the last minute and the OFS price fixed at Rs 5,662 per share as against the floor price of Rs 5,450. As a result, none of the HNIs got the allotment, according to market participants.On Tuesday, 4.5 lakh shares were auctioned on NSE at an average price of Rs 7,469 while around 93,000 shares were auctioned on BSE at Rs 7,456 per share. HNIs had to pay a differential amount between the short sale price and the auction price of Rs 1,700-1,800 per share during the auction on Tuesday, causing them an overall loss of up to Rs 100 crore, said dealers.On Thursday, the OFS received bids for 7.254 million shares from non-retail shareholders as against offered size of 1.546 million shares or a total of 3.092 million shares including green shoe option.

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