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Kolkata: KSH International shares listed at a discount to the IPO price on Tuesday after the company management was forced to trim the public issue size after an 83% subscription to Rs 710 crore issue by shrinking it to Rs 644.4 crore. They trimmed the OFS part.
The shares were listed at Rs 370 per share on the NSE, which marked a discount of 3.65%. On the BSE, the shares debuted at Rs 370 apiece, which was a discount of 3.65%. The company's market cap shares stood at Rs 2,506.96 crore after listing.
KSH International claimed to be the third largest manufacturer and the largest exporter of magnet winding wires in India and its products are used in transformers, motors, alternators and generators and the sectors where these are widely used are power, renewables, industrial, railways, automotive, home appliances, refrigeration, and air conditioning.
However, it had quite a poor response to the Rs 750 crore IPO that it launched on Dec 16. The issue could manage to collect only 83% overall subscription with the QIB portion fully subscribed. But the portions earmarked for non-institutional investors and retail investors were subscribed 42% and 86% respectively. The management of the company, therefore, trimmed the size of its IPO to Rs 644.4 crore to record the minimum 90% subscription threshold needed for the issue to sail through.
According to investorgain, the GMP of KSH International IPO stood at zero on Dec 23. It was zero all through except on Dec 16, when the bidding process began. On Dec 17, it again slumped to zero. However, it must be kept in mind that GMP is an unofficial indicator, can be very volatile and does not guarantee any listing gain or loss.
"In the bulls case, KSH International IPO listing price could be around Rs 380 to Rs 390, whereas in the bears case, KSH International IPO listing price could be around Rs 355 to Rs 365," Anuj Gupta, Director at Ya Wealth was quoted in the media as saying. While the GMP indicates a flat listing, if the market is tepid today, it could also post a loss on listing.
SEBI has provided for options to ensure that an issue gains 90% subscription. These include reducing the size of the Offer-for-Sale (OFS), extending the issue subscription period, or lowering the price band. If the company failed to take any of these measures, the IPO would be canceled and the entire amount would be refunded to the investors. KSH has opted for reduction of the OFS part and scaled it down from the earlier Rs 290 crore to Rs 224.4 crore. However, the fresh issue size was unchanged at Rs 420 crore. As a result, the IPO subscription crossed the 90% threshold. However, a day before the IPO opened for public subscription on December 15, KSH International managed to raise Rs 213 crore from 10 anchor investors at Rs 384 per share.
The Pune-based company will utilize Rs 226 crore from the net proceeds of the fresh issue to repay debt, Rs 87 crore for purchasing and installing new machinery for expansion and Rs 8.8 crore for purchasing and installing a rooftop solar power plant for power generation at the Supa facility. The remaining amount, up to Rs 76.9 crore, will be used for general corporate purposes.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, any form of alternative investment instruments and crypto assets.)
