The initial public offering of Shyam Metalics and Energy garnered 121 times subscription and generated bids of more than Rs 78,000 crore. The qualified institutional buyer (QIB) portion of the issue was subscribed 153 times, the high networth individual portion saw 340 times subscription and the retail portion was subscribed nearly 12 times. Shyam Metalics’ IPO size was Rs 909 crore of which Rs 657 crore was fresh fund raise to help retire debt. The IPO price band was Rs 303-306 per share. At the top-end, the Kolkata-based firm will have market capitalisation of Rs 7,805 crore on a post diluted basis.
Market players said the attractive grey market premium and bullish sentiment towards metal stocks led to the huge demand in the IPO. Most brokerages had recommended the IPO to their clients citing reasonable valuations.
“Considering the trailing 12-month (Dec 20) adjusted earnings per share of Rs 21.02 on a post issue basis, the company is going to list at a price-to-earnings (P/E) of 14.6 times whereas its peers namely Tata Steel and JSW Steel are quoting at higher PE of 16.6 times and 21.6 times, respectively,” said a note by Marwadi Financial Services.
Meanwhile, another IPO that closed on Wednesday of Sona BLW Precision Forgings received relatively lukewarm response with just 2.3 subscription. The QIB portion of this issue was subscribed 3.54 times, HNI portion just 0.40 times and retail portion 1.6 times.
Through the IPO, the auto component maker raised Rs 5,250 crore in fresh capital. The issue also comprised of secondary share sale worth Rs 300 crore. Sona Comstar had priced its IPO between Rs. 285 – Rs. 291 per share. At the top-end, Sona BLW will be valued at Rs 17,000 crore. Based on FY21 earnings, the P/E multiple worked out to 74 times.
The IPOs of Dodla Diary and Krishna Institute of Medical Sciences (KIMS) garnered 1.4 times and 0.27 times subscription on Wednesday, the first day of the issue. Both IPO close on Friday.
Dodla Dairy has fixed a price band of Rs 421 to Rs 428 per share. At the top-end, the company will be valued at Rs 2,546 crore. The integrated dairy company focused on the South Indian market is looking to raise Rs 50 crore in fresh capital and around Rs 470 crore will be secondary share sale.
KIMS, one of the largest corporate healthcare groups in AP and Telangana, has fixed its price band in the range between Rs 815 and Rs 825 per share. At the top-end, the company will have a market cap of Rs 6,602 crore. KIMS is raising Rs 200 crore in fresh capital and over Rs 1,900 crore will be secondary share sale.
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