Sona Comstar IPO fully subscribed on Day 3

NEW DELHI: The initial public offer of Sona BLV Precision Forgings, also known as Sona Comstar, fully subscribed on the third day. However, The Rs 5,550 crore IPO was saw muted response from investors on Wednesday, during the bidding process.

At 02:15 pm, investors bid for 11,09,20,869 shares of the company, out of a total issue of 10,71,05,262. The company is selling its shares in the price band of Rs 285-291.

The tepid response from the investors is hinting that the IPO’s rich valuations are proving to be a deterrent. The company’s IPO is roughly valued at 76 times one-year forward earnings, making it one of the most expensive issues to hit the primary market in recent times.

Despite the rich valuations, analysts are bullish on the counter. They said Sona BLW is a play on the electric vehicle theme. While the IPO valuation appears rich, the auto component maker is a consistent performer, they added. Most analysts recommended 'subscribe' to their clients on the IPO.

The company had raised Rs 2,500 crore from 42 anchor investors on Friday.

The issue comprises up to Rs 300 crore worth of fresh equity and an offer for sale of shares worth Rs 5,250 crore by Singapore VII Topco III Pte, an affiliate of Blackstone.