HPL Electric & Power IPO was subscribed by 29 per cent on the second day of offer till 5 pm. The public offer has received bids for 41,65,910 shares against 1,44,40,001 shares offered by the company. The company on Wednesday garnered up to Rs 108 crore from anchor investors by selling shares at the upper price band of Rs 202 apiece. The list of anchor investors include HTCL-HDFC Prudence Fund, Birla Sun Life Emerging Leaders Fund-Series I, Baroda Pioneer Growth Fund, Nomura Singapore Ltd, Copthall Mauritius Investment Ltd and IDFC Sterling Equity Fund. The company has fixed a price band of Rs 175-202 for the public offer and the issue will close on September 26.
Angel Broking has ‘Neutral’ rating on the issue. The brokerage house in a research note said, “On the valuation front, at the upper end of the price band, the pre-issue P/E works out to 25.6x of its FY2016 earnings which is lower compared to its peers. However, this discount is justified considering its significantly low ROE, stretched working capital and low profitability compared to its peers. Considering past financial performance and poor visibility on future growth, we rate this issue as ‘Neutral’.”
Net proceed of the IPO will be utilised for repayment of loans, to fund working capital requirements and for general corporate purposes. Shares of the company are proposed to be listed on BSE and NSE.
SBI Capital Markets, IDFC Bank and ICICI Securities are the book running lead managers, while Karvy Computershare is the registrar to the issue.
The company is engaged in the business of manufacturing metering solutions, switchgears, lighting equipment and wires and cables, among others.