Likhitha Infrastructure had to extend its IPO due to weak QIB subscription. Although the issue sailed on retail backing while QIB distanced from this IPO.
Equitas Small Finance Bank’s Rs 518 crore IPO will open for subscription today at a price band of Rs 32-33 per share.
Likhitha Infrastructure share price jumped 8.4 per cent on the market debut day as the stock got listed at Rs 130.10 on BSE, a premium of Rs 10.10 on the upper band of the issue at Rs 116-120 per equity. On NSE, Likhitha Infrastructure shares were listed at Rs 130, an 8.3 per cent premium over IPO price. However, minutes after the listing, the premium of the oil and gas pipeline infrastructure service provider fell to 4.17 per cent and the stock was trading at Rs 125 apiece. “Taking cues from the grey market, limited activity has been seen in Likhitha Infrastructure as it was trading with only Rs 3-5 premium,” Abhay Doshi, Gujarat based independent dealer in unlisted shares, told Financial Express Online.
The company had to extend its IPO due to weak QIB subscription. Although the issue sailed on retail backing while QIB distanced from this IPO. “Primary market has gone into cautious mode post weak listings of recent IPOs. Likhitha will be listed In T group and hence listing may also tend to be muted,” Doshi added.
The Rs 61-crore issue was subscribed 9.51 times during the 3-day bidding process. The IPO of the oil and gas pipeline infrastructure service provider was extended by two days and the price band was also revised lower to Rs 116-120, from Rs 117-120 per share. Last week, Likhitha Infrastructure shares were trading with marginal premium in the grey market. According to the data available on the NSE, Likhitha Infrastructure issue received bids for 4.84 crore shares against 51 lakh shares on offer. Qualified institutional buyers (QIB) category was subscribed 21.99 times, non-institutional investors category 1.54 times, and that for retail individual investors was subscribed 23.71 times.
Earlier, the book running lead manager to Likhitha Infrastructure had informed NSE that all bidders (QIB, non-institutional bidders and retail individual bidders) shall have the option to withdraw their applications before the closing of the issue.
Research and brokerage firm Choice Broking suggested to avoid this issue. It also noted that the demanded valuation was stretched and many strong established companies were available at lower valuations for the investors. Moreover, being labour oriented business operations, the company is highly susceptible to labour laws.