Many Qataris take bank loans to subscribe to IPO

 22 Jan 2014 - 3:32


People waiting at a bank to apply for the IPO on the last day of the subscription process yesterday.


DOHA: A large number of Qataris relied on bank loans to apply for subscription to Mesaieed Petrochemical Holding Company’s primary issue, but there were some who applied for a million shares and paid the application amount of QR10.2m directly from their bank accounts.
The low-priced initial public offering (IPO) launched at the behest of the state to help citizens, opened for subscription (from the Qatari public and select institutions) on December 31 last year. 
The subscription process closed yesterday, dashing the hopes of those expecting that the company might extend the deadline.
Yesterday being the last day, banks witnessed crowds since early morning. There was a huge turnout of women as well.
Banks gave away loans on soft terms to a large number of people to help them apply for subscription. 
It is understood that banks would not be charging interest on the entire loan given away but rather on the amount deducted by MPHC for the shares after allotment.
Banks have also decided to extend the tenure of repayment of loans to six months from the initial 30 days, banking industry sources said.
They pointed out that while many applicants had relied on bank loans, some Qataris applied for a million shares and paid the application amount of QR10.2m out of their savings.
One could, under the IPO rules, apply for a minimum lot of 50 and a maximum of a million shares.
Banking industry sources said earlier they expected some 200,000 people might apply.
Qataris based overseas used the online mode to apply, it was  learnt. They included students, travelling businessmen and people undergoing treatment abroad.
A woman who applied yesterday and gave her name as Meshail Al Ansari told Al Sharq she hoped individual applicants could be allotted at least 1,000 shares.
Another female applicant, Dr Nawal Al Alam, said she expected the per capita share allocation could reach up to 1,500.
Both said they were keen to retain the scrip, once allotted to them, over the long-term as prized investment.
The Peninsula