Demand For Medibank IPO Shares Could Exceed A$4.8 Billion

Because of the huge demand for shares of Medibank Private, the state-owned health insurer could possible raise A$4.8 billion in fresh capital and become the biggest listing in Asia over the past 24 months.

There is no word yet from the Australian government if it would sale down the general retail offer, but given that it placed a cap of A$5.5 billion and plans to allocate A$1.5 billion for brokers, is an indicator that there may be less stock available for retail investors.

So far, the brokers and retail investors have applied for A$16.79 billion which is thrice the biggest value the government has given the health insurer. Established in 1976, Medibank's institutional offer begins on Tuesday, Nov 18, while its listing would start on Nov 25.

As Australia's population economically and ages as well, demand for health services is expected to grow. As a consequence, analysts foresee health firms dominating Australia's biggest IPO year with three of the four largest in the health industry. Reuters added that Estia Health, a service provider for seniors, had filed a prospectus that would eventually lead to its public listing which could potentially value Estia at $1 billion.

Finance Minister Mathias Corman acknowledged that the retail offer to the general public, policyholders and employees, which closed on Friday, attracted significant interest even if processing of retail applications are yet to be completed.

More analysis of the Medibank IPO in this next report.

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