Kelkar IPO closes with a bang, subscribed 27 times

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Mumbai | Published: October 31, 2015 12:05:09 AM

Mumbai-based fragrance and flavour maker, SH Kelkar & Company received an astounding response to its three-day IPO that ended on Friday....

Mumbai-based fragrance and flavour maker, SH Kelkar & Company received an astounding response to its three-day IPO that ended on Friday even as sentiment in the secondary market was weak and benchmark indices ended in the red for the fifth straight session.

The R510-crore IPO was subscribed a little over 27 times as on 6.45pm and saw interest across all investor categories, stock exchange data showed.

The qualified institutional buyers (QIBs) category received nearly 26 times the bids. Institutional investors, both domestic and foreign-based, bid for 15.03 crore shares against 58.8 lakh shares reserved for the category, data showed. The non-institutional category comprising high net-worth individuals (HNIs) saw 88 times more shares applied for against 43.1 lakh shares reserved for them. HNIs bid for 37.62 crore shares.

The retail book received a positive response and received twice the bids, as opposed to under-subscription seen in seven out of 17 IPOs this year. Retail investors, whose investment should not exceed a total Rs 2 lakh as per Sebi rules, bid for 2.12 crore shares against 1.004 crore shares on offer.


Many domestic and foreign brokerages had recommended clients to subscribe to the issue, citing sustained growth momentum and attractive pricing. The company had set a price band of R173-180 per share.

Kotak Investment Banking and JM Financial are the financial advisors to the issue.

SH Kelkar had raised v150 crore on Tuesday after allotting shares to investors in a pre-IPO placement. List of anchor investors included T Rowe and Neuberger Berman, ICICI Prudential, L&T Mutual Fund and Small Cap World Fund.

The IPO consisted of a fresh issue of R210 crore, and an offer for sale worth Rs 298 crore (at the upper price band) by existing shareholders, including Blackstone Capital Partners and SH Kelkar’s non-executive director Prabha Ramesh Vaze.  In 2010, Blackstone had bought a 33% stake in the company for Rs 243 crore.

The company will use the proceeds of the issue for repayment of existing corporate debt, to infuse fresh funds into subsidiary company KV Arochem, and for general corporate purposes.

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