The initial public offering (IPO) of Bharat Dynamics which began on Tuesday was subscribed by 0.32 times with investors bidding for 72.49 lakh shares against 2.24 crore shares reserved for them. Qualified institutional buyers (QIB) bid for 0.5 times of the total shares reserved for them. High Networth Individuals (HNI’s) bid for 0.02 times of the shares reserved. Retail investors bid for 0.21 times and employees bid for 0.08 times of the shares reserved for them. Bharat Dynamics, which is engaged in the manufacture of missiles, underwater weapons, launchers, countermeasures and test equipment has priced its IPO between Rs 413-Rs 428 per share. When calculated at the upper band the offer could garner Rs 960 crore. The offer will close on Thursday. Investors can apply for a minimum of 35 shares and multiples of 35 thereof. The 100% offer-for-sale constitutes 12.25% of the post-offer paid-up capital of the company. The offer is a part of the disinvestment programme of the government and all the proceeds will go to the central exchequer.
As per the draft red herring prospectus, Bharat Dynamics is the sole manufacturer, in India, of surface to air missiles, torpedoes, and anti-tank guided missiles. It is also the sole supplier of surface-to-air missiles and anti-tank guided missiles to the Indian armed forces. The company at present has manufacturing facilities in Hyderabad, Bhanur and Vishakapatnam. The company has an order book of Rs 10,543 crore. It posted a net profit of Rs 490 crore for the year ended March 2017 and for the six months ended September 2017, it reported a profit of Rs 172.5 crore.
Bharat Dynamics joins a long list of companies that have raised funds from the market in the recent past. In 2017, 36 companies raised Rs 67,147 crore through IPOs. Listing gains and the positive sentiment in the market are among the reasons attributed to the trend.