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Capital Markets

Croatia: INA flotation captures investors’ imagination

As a result of the overwhelming demand, the stock soared 40% when it debuted on the ZSE in early December, hitting K2,400 within minutes of starting trading.

The initial public offering for Croatian oil and gas company Industrija Nafte (INA) has proved a runaway success, with the 1.7 million share transaction attracting a seven times oversubscription.

Lead managed by Merrill Lynch and RZB, the flotation involved the Croatian government selling a 17% stake at K1,690 per share – just above the midpoint of the K1,400 to K1,900 indicated range. Part of the transaction comprised an offering of global depositary receipts, which were listed on the London Stock Exchange at $303.41 per GDR.

As a result of the overwhelming demand, the stock soared 40% when it debuted on the Zagreb Stock Exchange (ZSE) in early December, hitting K2,400 within minutes of starting trading. By mid-December the shares had fallen back slightly to trade at K2,205, still a healthy premium to the issue price, however. Meanwhile, the GDRs in London were trading at $380.

Commenting on the transaction to Euromoney, Lorcan O’Shea, director of equity capital markets for Merrill Lynch in London, says: “The government could have priced the deal at the top end of the range, but chose not to so as to maximize domestic retail participation. They still achieved a very full valuation for the stock however.”

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