The initial public offering (IPO) of Parag Milk Foods saw tepid response on Thursday with the issue subscribed nearly 0.23 times.
The initial public offering (IPO) of Parag Milk Foods saw tepid response on Thursday with the issue subscribed nearly 0.23 times. Bids for 43.6 lakh shares of the total 1.91 crore shares were received on day two of IPO.
The qualified institutional buyers (QIB) portion was subscribed 0.12 times as they bid for 13 lakh shares of the 103 lakh shares on offer for them. High net-worth individuals on the other hand bid for 11 lakh shares of the 50 lakh shares reserved for them, bidding 0.22 times. Retail investors were a little more enthusiastic as they bid for nearly 50% of their quota or 17 lakh shares of the 33 lakh shares reserved. Employees bid for 2.19 lakh shares of the 3 lakh shares reserved.
The price band for the issue is Rs 220 to Rs 227 and at the upper end of the price band, the share is valued at 50.4 times its FY15 earnings. The public offer which opened on Wednesday closes on May 6. The company allotted 1.51 crore shares at Rs 227 apiece to anchor investors including Nomura India Investment Fund, Morgan Stanley, Tata Balanced Fund among others, raising Rs 342 crore in the process on Tuesday. The IPO includes a fresh issue of shares worth Rs 300 crore and an offer for sale amounting to Rs 466 crore.
ICICI Direct believes Parag Milk Foods is available at fair valuations considering the opportunity size lying ahead of the firm in the dairy industry. The discount of Rs 12 per share on the final issue price for retail investors increases the attractiveness of the firm for long term investors.