PNC Infra IPO sees muted response from investors on day 1

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Mumbai | Published: May 9, 2015 12:12:44 AM

Infrastructure construction company, PNC Infratech’s initial public offering (IPO) was subscribed 0.01 time...

Infrastructure construction company, PNC Infratech’s initial public offering (IPO) was subscribed 0.01 time on first day of the three-day offering. The company aims to raise R478 crore from the public issue that closes on May 12.
Institutional investors’ category did not garner any bids on day one. A little over 25.74 lakh shares are reserved for qualified institutional buyers (QIBs), stock exchange data showed.

The Agra-based company raised R146 crore by issuing 38.62 lakh shares to institutional investors in a pre-IPO placement. The anchor allotment was made at R378 per share. The issue is priced in the range of R355-378 apiece.

Nine domestic as well as foreign institutions participated in the pre-placement offer. Notable names include HDFC AMC, Birla Sun Life AMC, Goldman Sachs, Kotak AMC, DSP Blackrock India, and Reliance AMC among others, data showed.

The non-institutional category – comprising of high net-worth individuals (HNIs) – bid for 770 shares against a reservation of 19.31 lakh shares.


Retail investors bid for 87,990 shares against 45.05 lakh shares reserved. Investors with less than R2 lakh investments are allowed to bid under this category. The employee category was subscribed 0.56 times of the 50,000 shares reserved.

People familiar with the matter said the first day performance was tepid given the volatility in secondary markets and the weekend break. However a successful anchor allotment on Thursday and hopes of recovery in secondary market will help draw investors to the issue, they said. Many domestic brokerages have a positive view on the company and recommended investors to subscribe to the issue.

The offer comprises sale of 1.29 crore shares of which, 1.15 crore shares are sold by the company and 14.21 lakh shares are sold by private equity player Nylim Jacob Ballas India .

Post-issue, the shareholding of the promoter and promoter group in the company will fall to 56.1% from the current holding of 72.3%. The company has planned to use the net proceeds to fund its working capital requirements (R150 crore), invest in its subsidiary (R65 crore), invest in capital equipment (R85 crore), repay certain debts (R35 crore) and for general corporate purposes, as stated in the regulatory filing.

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