The second day of Mahanagar Gas’ initial public offering (IPO) saw an overwhelming response as investors bid for 6.8 crore shares of the total 1.73 crore shares on offer, oversubscribing 3.92 times.
The second day of Mahanagar Gas’ initial public offering (IPO) saw an overwhelming response as investors bid for 6.8 crore shares of the total 1.73 crore shares on offer, oversubscribing 3.92 times. The IPO is a complete offer for sale (OFS) of `1,039 crore by existing promoters including state-run GAIL India and BG Asia Pacific Holdings (a part of Royal Dutch Shell).
The qualified institutional buyers (QIBs) oversubscribing their portion 6.44 times as they bid for 3.15 crore shares of the 48.9 lakh shares on offer for them. High net-worth individuals, on the other hand, bid for 87 lakh shares of the 36 lakh shares reserved for them, oversubscribing 2.38 times. Retail investors bid for the issue 3.22 times of their quota or 2.76 crore shares of the 85 lakh shares reserved. Employees, who were offered a discount of `38 per share on the upper end of the price band, bid for 29,575 shares of the 2 lakh shares reserved for them.
The issue, which closes on June 23, has a price band of `380-`421 per share. Given its FY16 earnings, the company is commanding an earnings multiple of 10.9 and 12.1 times for the upper and lower price range.
Mahanagar Gas ended FY16 with revenues of `2,121 crore, down 0.6% and PAT of `308 crore, up 2.5% compared to `2135 crore and `301 crore reported in FY15. The promoters of the company hold 49.5% each of the total equity share capital which will be brought down to 32.5% each post completion of the issue.
Kotak Mahindra Capital Company and Citigroup Global Markets India are the investment bankers to the issue. Mahanagar Gas is the largest distributor of piped natural gas (PNG) and compressed natural gas (CNG) in Mumbai, its adjoining areas and Raigad district in Maharashtra.