Vibhor Steel Tubes IPO subscribed 299 times on Day 3; check latest GMP & other details

The initial public offering (IPO) by Vibhor Steel Tubes Ltd on Thursday continued to receive a strong response from investors on the final day (Day 3) of bidding process. As per BSE data, the IPO recorded a subscription of 298.86 times on Day 3. By 6:51 pm, the issue received 1,07,36,25,300 bids against 35,92,445 shares on the block. The offering received more than 28 lakh applications and bids worth Rs 16,211 crore as per some estimates. The quota reserved for non-institutional investors (NIIs) was subscribed 721.33 times and employee reserved category was booked 201.48 times.

Retail investors and qualified institutional buyers (QIB) were subscribed 188.17 times and 178.73 times, respectively. Price band for the issue was fixed at Rs 141-151 per share. And, the lot size was 99 equity shares. The three-day issue opened on February 12.

The company is planning to raise Rs 72.17 crore from the offering and aims to be listed with NSE and BSE. Prior to the initial share sale, the Haryana-based firm raised Rs 21.51 crore from the anchor book subscription.

Vibhor Steel Tubes intends to utilise the proceeds from the IPO for working capital requirements and general corporate purposes.

It has recently renewed its agreement with Jindal Pipes, with effective from April 1, 2023, to manufacture and supply the finished goods under the brand name Jindal Star to Jindal Pipes and its approved customers based on monthly card rates.

The tenure of this agreement is for six years and can be further renewed if required by both parties. According to the management, as much as 88 per cent of the revenue comes from Jindal Pipes.

Brokerage views

"We believe the company's exclusive supply arrangement with Jindal Pipes Ltd under the renowned brand 'Jindal Star' has heartened its position in the market along with diverse product portfolio serving the needs of all sectors. Hence, considering all the parameters, we are recommending investors to 'Subscribe' the issue for listing prospective only," said Mehta Equities Ltd.

"We are positive on Vibhor Steel Tubes for the long term as both India's Steel Tubes market offers a massive runway for growth over the next 3-5 years ahead and has diverse applications ranging from infrastructure, oil & gas, housing and metro. More importantly, the company has a anchor customer like Jindal Pipes which we view as a positive as this ensures steady volumes and protects margins which makes its positioning very strong," said ProfitMart Securities.

Latest GMP

In the grey market, Vibhor Steel Tubes shares were last seen trading at a premium of over 80 per cent against its issue price of Rs 151 (upper price band). The stock is likely to get listed on February 20, 2024.

Khambatta Securities Ltd is the sole manager to the issue. And, KFIN Technologies Ltd has been appointed as the registrar.

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