Shares in the Medibank Private float just got more expensive for institutions as the Federal Government lifts the top price range to $2.30 from $2.
This values the IPO at up to $6.3 billion but will probably be less, depending on how many shares go to retail and how many go to institutions.
In any case, the returns to the Federal Government will be hundreds of millions of dollars greater than the $5.5 billion initially thought.
Finance Minister Mathias Cormann says strong demand from domestic and offshore institutional investors led the government to increase the indicative price range.
The indicative price range was initially set at $1.55 to $2.00 per share.
Following strong interest from institutions, this has now been revised to $2.00 to $2.30 per share.
This will not impact the existing retail price cap which ensures retail investors will pay no more than $2.00 per share, even if the institutional price is set above this.
No decisions will be made on the overall split of share allocations between the retail and institutional offers, nor between domestic and offshore institutions, until the Share Offer has been completed.
The final price and the number of Medibank Private shares investors will receive is expected to be announced next Tuesday.