Addressing a news conference here on Thursday HCL vice-chairman Vineet Nayyar said it was the largest investor demand for any Indian IPO to date. Earlier, the Hughes Software issue, also offered through the book built route, was oversubscribed by many times and generated demand for Rs 6,000 crore.

"The issue saw exceptional demand from high quality institutional investors in India and abroad, as well as from retail investors," Nayyar said. However, he said the company had yet to receive data on how much of demand was generated by each of them. "We decide on the allotment after considering the mix," hesaid, and indicated that mutual funds like Unit Trust of India may also be considered as retail investors.

He did not comment on whether the 25 per cent allotment for retail investors may be increased. The company had roped in the National Stock Exchange and Bombay Stock Exchange for larger retail investor participation across India.

However, he ruled out retaining the oversubscribed portion and said only 10 per cent of the company would be with the public. Post-issue its equity share capital will increase to Rs 55.47 crore. The proceeds will be used for acquiring companies to get access to new markets and internet and e-commerce technologies. Due diligence has already been done on some companies HCL has identified.

Company officials said they expected earnings per share of about Rs 31 in the year ending June 30, 2000, and a price-to-earnings multiple of Rs 40-42 by that time. Nayyar said he expected the shares to be listed on the exchanges in the second week of January.

The company had earlier set arevised price range of Rs 500-580 per share for the offering of 12.78 million shares through book-building which was conducted between November 16 and November 24.

Nayyar said the success of the issue indicated the Indian economy will be driven by the information technology (IT) industry to a large extent. ``The huge demand for software shares on the stock exchanges is the major reason for the huge response for the HCL issue,'' said an analyst.