Coffee Day offer froths up on day 3

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Mumbai | Updated: October 17, 2015 5:12:54 AM

Stock exchange data showed that qualified institutional bidders (QIBs) continued to exhibit confidence in the largest IPO deal since December 2012.

The initial public offering (IPO) of Coffee Day Enterprises successfully closed on Friday after receiving strong support from institutional investors, while high networth individuals (HNIs) and retail investors remained on the sidelines. The IPO was subscribed 1.81 times, assuring the company of at least R1,150 crore.

Stock exchange data showed that qualified institutional bidders (QIBs) continued to exhibit confidence in the largest IPO deal since December 2012. Institutional investors bid for 3.23 crore shares against 73.80 lakh shares reserved for the category, data showed. The QIB book was subscribed 4.39 times.

The non-institutional category — comprising HNIs — bid for 29.20 lakh shares against a reservation of 53.88 lakh shares. The book was subscribed 0.54 times and experts said the weak undertone in secondary markets made margin funding risky.

ccd-ipo

The retail category was subscribed 0.9 times as investors applied for 1.13 crore shares against 1.25 crore on offer.

On Tuesday, the Bengaluru-based company had raised around R334.27 crore through a pre-IPO placement to anchor investors. A little over 1.03 crore shares were allotted to 17 institutional investors at R322 apiece. List of anchor investors included Blackrock, Government Pension Fund Global, ICICI Prudential Mutual Fund, Merrill Lynch, Swiss Finance Corp and Axis Mutual Fund.

The public issue, which closes on Friday, is priced at R316-328 per piece. The company aims to raise a total of R1,150 crore public investors to pay back existing debts and for general corporate purposes. The company aims to retire R632.8 crore of its total debt, according to information made available in the draft prospectus.

Kotak Investment Banking, Citigroup, Morgan Stanley, Axis Capital, Edelweiss and Yes Bank are the lead book running managers for the issue.

Coffee Day Enterprises is the parent company of Coffee Day Group and the company operates the largest chain of coffee stores in India. The company also has presence in real estate sector through a subsidiary, Sical Logistics. It also owns a 16.75% equity holding in information technology company, Mindtree.

Shares of Sical Logistics ended down 2.8% or R4.6 to end at R159.70 per share on the BSE, exchange data showed.

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