The shares of state owned Bharat Dynamics got listed at a discount to the issue price on Friday.
The shares of state owned Bharat Dynamics got listed at a discount to the issue price on Friday. The stock listed at Rs 370, 13.55% below its issue price of Rs 428 and ended the session at Rs 386.20, at a loss of 9.76% to its issue price. Bharat Dynamics, which is engaged in the manufacture of missiles, underwater weapons, launchers, countermeasures and test equipment had priced its IPO between Rs 413- 428 per share. The 100% offer-for-sale constituted 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 the 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.
The IPO of Bharat Dynamics was subscribed by 1.26 times. Investors bid for 2.82 crore shares against 2.24 crore shares that were on offer. The portion reserved for qualified institutional buyers was subscribed 1.50 times the number of shares on offer, while the retail investor portion was subscribed 1.29 times. The non-institutional segment was bid for 0.50 times the number of shares allotted. 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.