Mahanagar Gas IPO oversubscribed 65 times on final day

By: | Updated: June 24, 2016 7:22 AM

The initial public offering (IPO) of Mahanagar Gas closed on Thursday with an oversubscription of 65 times with investors bidding for 111.7 crore shares of the total 1.73 crore shares on offer.

mahanagar gas ipoIn FY16, Mahanagar Gas reported a decline of 0.6% in revenues at `2,121 crore while the PAT grew 2.5% to `308 crore. (Reuters)

The initial public offering (IPO) of Mahanagar Gas closed on Thursday with an oversubscription of 65 times with investors bidding for 111.7 crore shares of the total 1.73 crore shares on offer. The issue included an offer for sale (OFS) of `1,039 crore by existing promoters including state-run GAIL India and BG Asia Pacific Holdings, a unit of Royal Dutch Shell.

Qualified institutional buyers (QIBs) bid for 35.68 crore shares of the 48.9 lakh shares reserved for them and the high net-worth individuals (HNIs) quota too was heavily over subscribed. Retail participation was also strong and the segment was oversubscribed 6.53 times. Employees showed interest in the IPO probably because they are being offered shares at a discount of `38 per share at the upper end of the price band.

In FY16, Mahanagar Gas reported a decline of 0.6% in revenues at `2,121 crore while the PAT grew 2.5% to `308 crore. Revenues from CNG and PNG comprised 70.5% and 29% of the company’s total revenues. The stock trades at a price to earnings multiple of 10.9 and 12.1 times at the upper and lower ends of the price band, respectively.

IIFL notes the company is looking to set up CNG stations on Mumbai-Pune, Mumbai-Goa and Mumbai-Nasik highways.

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