The initial public offering (IPO) of Exxaro Tiles, a midsized vitrified tiles manufacturer, has got a good response as the offering was subscribed 2.13 times within hours of opening on August 4.
The offer had received bids for 2.44 crore equity shares even before noon against the IPO size of 1.14 crore equity shares, the subscription data available on the exchanges showed.
After raising Rs 23.68 crore from anchor investors on August 3, Exxaro Tiles cut its offer size to 1.14 crore equity shares from 1.34 crore shares.
Retail investors yet again led from the front, subscribing the issue 4.16 times over. The portion set aside for non-institutional investors was subscribed 15 percent and that of employees 7 percent, while qualified institutional buyers are yet to put in their bids.
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Incorporated in 2008, Gujarat-based Exxaro Tiles has two manufacturing facilities at Vadodara and Talod. The company's products are broadly divided into two categories—double charge vitrified tiles and glazed vitrified tiles.
The company, which sells products under its umbrella brand Exxaro, is planning to mobilise Rs 161.08 crore through the public offer that consists of a fresh issue of 1.11 crore shares and an offer for sale of 22.38 lakh shares by Dixitkumar Patel. The price band for the offer has been fixed at Rs 118-120 per equity share.
"In terms of valuations, the post-issue FY2021 PE works out - 35.2x to (at the upper end of the issue price band), which is low compared to peers (Somany Ceramics - 43.7x & Kajaria Ceramics - 52.7x)," said Amarjeet Maurya- AVP-Mid Caps at Angel Broking.
Exxaro Tiles has a better revenue growth compared to its peers (over FY18-21). "The valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue," he added.
Exxaro Tiles shares traded at a premium of Rs 20 in the grey market, the IPO Watch and IPO Central data showed. This translates to a trading price of Rs 140, a premium of 16.7 percent over the higher end of the issue price band of Rs 120.
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