State-run e-auctions and procurement solutions firm MSTC initial public offer (IPO) saw a tepid response on Day 1, and was subscribed about 4% at 4.15 pm on Day 1.
State-run e-auctions and procurement solutions firm MSTC initial public offer (IPO) saw a tepid response on Day 1, and was subscribed about 4% at 4.00 pm on Day 1. Notably, the firm looks to to raise Rs 226 crore at the upper price band. The Kolkata-based company has fixed the price band for its public offer at Rs 121 to Rs 128 per equity share. The issue will remain open till Friday. Out of the issue size of a total of 1.76 crore, a total of 7.53 lakh bids had been received implying a subscription of about 4%, all Exchanges Demand graph from NSE showed.
As part of the public offer, MSTC will be selling 1.76 crore equity shares, or 25% of total paid-up equity, by the government of India, acting through the ministry of steel, through the initial stake sale. According to the firm’s prospectus, the minimum bid lot is fixed at 90 equity shares and and in multiples of 90 equity shares thereafter. A discount equivalent to Rs 5.50 per share on the offer price is being offered to retail individual bidders and eligible employee bidders. At present, the government holds 89.85% stake in MSTC. Following the divestment, it will come down to 64.85%.
Sharing its view on the issue, HEM Securities the financials are a mjor dampener. “The company is bringing the issue at p/b multiple of approx 2.63 at higher end of price band of Rs 128/share. Although company is one of the leading PSU entities engaged in providing e-commerce services but loss making financials are acting as a dampener,” the firm noted. The firm has a long-term subscribe on the issue.