The initial public offer of Avenue Supermarts, the operator of retail chain D-Mart, to raise Rs 1,870 crore was oversubscribed 5.71 times on the second day of the offer on Thursday.
The IPO, the biggest since PNB Housing Finance's Rs 3,000 crore offer in October last year, received bids for 25.31 crore shares against the total issue size of 4.43 crore shares, data available with the NSE till 1700 hrs showed.
The portion set aside for qualified institutional buyers (QIBs) was oversubscribed 9.14 times and that for non-institutional investors 4.97 times. Retail investors category was subscribed 4.06 times of the shares on the offer.
Avenue Supermarts on Tuesday raised nearly Rs 561 crore by allotting shares to anchor investors. The price band for the IPO, which will close today, has been set at Rs 295-299.
Avenue Supermarts plans to raise Rs 1,870 crore through the IPO and the proceeds would be utilised for various purposes, including loan repayment.Avenue Supermarts was incorporated on May 12, 2000 at Mumbai, Maharashtra as a private limited company under the Companies Act, 1956.
35 percent of the issue size has been reserved for retail investors and 15 percent for non-institutional investors.
Currently, D-Mart operates close to 120 stores, most of them located in Maharashtra and Gujarat.
Nine merchant bankers-Kotak Mahindra Capital, Axis Capital, Edelweiss Financial Services, HDFC Bank, ICICI Securities, JM Financial Institutional Securities, Inga Capital, SBI Capital Markets and Motilal Oswal Investment Advisors-are managing the offer.
A majority of brokerages have given a subscribe call to the IPO.
Nirmal Bang Securities in a note said Avenue Supermarts is a long-term story and should be viewed from 2-3 years point of view. We like the business model of the company given its lean cost, customer centric focus and cluster based ownership model.
KR Choksey said the company has total debt of Rs 12.4 bn at the end of 9MFY17, which is expected to reduce by Rs 10.8 bn over FY18-20. This in turn could result company to stand at almost debt free level, which could improve return ratios further going ahead. It recommends subscribe to the issue.
YES securities research, Choice Broking and Angel Broking have also given subscribe call to the issue.
(With PTI inputs)