The Indian rupee recovered from a two-week low to end higher on Wednesday, as exporters aggressively sold dollar holdings, offsetting waning outflows linked to a recent share offering, dealers said. The partially convertible rupee ended at 39.515/525 per dollar, climbing smartly off an early low of 39.69, its weakest since January 22.
It ended at 39.555/565 on Tuesday. "Outflows from the very large IPO have finally tapered off. Demand for the dollar has been met," said Pradeep Khanna, head of currency trading at HSBC.
Last month, Reliance Power raised a record $3 billion through an initial share sale that generated sizeable foreign interest. The IPO had received bids worth $190 billion and the company is in the process of refunding part of the cash.
Foreigners bought $1.3 billion of Indian shares in the three days to February 5, data released by the Securities and Exchange Board of India showed, with a large part of the overseas funds likely flowing into a $1.6 billion sale by realty firm Emaar MGF Land Ltd.
The IPO, which a banking source said had been extended until February 11 from a scheduled Wednesday close, had received bids for about 60 percent of the issue, mostly at the lower end of the price band, data from the National Stock Exchange showed.