The Prince Pipes and Fittings' Rs 500 crore initial public offering (IPO) received a muted response from investors on Day 1. The IPO, which opened today and closes on 20 December, was subscribed 28 per cent on the opening day. The shares are available at a price band of Rs 177-178 apiece in a lot size of 84 shares and its multiples.
The issue has received bids for 55.57 lakh equity shares against total IPO size of 1.97 crore shares. The segment for retail investors was subscribed 47 per cent, while the category for non-institutional investors received subscription of 2 per cent, as per NSE data. The quote for qualified institutional buyers was subscribed 5 per cent.
The offer comprises of fresh issue of Rs 250 crore and an equal amount through offer-for-sale (OFS). The OFS would result in promoters' stake reducing from 90 per cent to 65.8 per cent post-IPO. JM Financial and Edelweiss Financial Services are the book-running lead managers to the issue while Link Intime India is the registrar to the issue.
In pre-IPO placement, Prince Pipes issued 59,26,820 equity shares, representing 6.18 per cent stake for cash consideration of Rs 106.18 crore by South Asia Growth Fund LLP at Rs 178 per equity share.
The company has already raised Rs 150 crore from eight anchor investors on Tuesday. It finalised the allocation of 84.26 lakh shares at Rs 178 apiece to anchor investors, which include SBI Oman, Aditya Birla MF, SBI Life Insurance, HDFC Life Insurance, Mirae Asset MF, HDFC MF, Tata MF and New Mark Capital.
The analyst at Geojit Financial Services has recommended a 'SUBSCRIBE' rating to the IPO with short to medium term perspective.
"Prince Pipes and Fittings Ltd is among the top 6 organised players in pipes and fittings in India with nearly 5 per cent market share. It has well-diversified product profile, strong presence in North, West and South India and 1,408 distributors across India (highest among peers). Its revenue grew by 16 per cent CAGR over FY16-19 while profitability grew 40.6 per cent CAGR in FY16-19. Post IPO, we expect reduction in debt as well as promoter leverage, providing meaningful upside in valuation," said Vinod Nair, Head of Research at Geojit Financial Services.
Edited by Chitranjan Kumar