Largest Indonesian steelmaker Krakatau Steel's shares increased 49 percent on Indonesia's capital market after the state-owned company's initial public offering was massively oversubscribed, international reports said.
The shares increased from the offer price of Rupiah 850 ($0.095) to Rupiah 1,270 ($0.14), hitting the maximum daily gain and triggering an automatic halt on higher bids, reports pointed out.
As SteelOrbis previously reported, the steel producer has entered into a public offering to sell 3.15 billion new shares or about 20 percent of the company's enlarged stocks. Following the offering that will value the firm at around $2 billion, the government's share ownership will decline to 80 percent, as the remaining 20 percent will be held by the investing public.
Krakatau will use the proceeds to upgrade the company's hot strip mill capacity to 3.5 million mt per year by 2013 from the current 2.4 million mt and to develop an area in Banten, West Java for the location of a new steel factory.