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  1. Precision Camshafts slips 4.7% on listing day

Precision Camshafts slips 4.7% on listing day

Precision Camshafts, which made a debut on Monday, slipped nearly 4.7% from its issue price and closed at R177.25.

By: | Updated: February 9, 2016 2:50 AM

Precision Camshafts, which made a debut on Monday, slipped nearly 4.7% from its issue price and closed at R177.25.

The shares of the auto components maker from Solapur was oversubscribed nearly 1.89 times during its initial public offer (IPO) last month.

With an issue price of R186, the shares of Precision Camshafts were listed at R163.10 and it fell as low as R155 during the day’s trade. The company which raised R240 crore in its IPO was the second company to be listed in the calendar year 2016 after Narayana Hrudayala.

The proceeds of the public offer, which had a price band of R180-R186, will be used to set up a new machine shop for manufacturing ductile iron camshafts at its export-oriented division. The book running lead managers of the issue were State Bank of India Capital Markets, HDFC Bank and India Infoline (IIFL).

 

Precision Camshafts is the second company after Coffee Day Enterprises to make a weak debut on bourses. Coffee day shares had slipped 4.6% from its issue price of R328.

The company which nearly has an 8% market share in the camshaft manufacturing business, builds around 150 types of camshafts and exports to global car makers like Ford motors and General motors. The company had reported a 38% annual growth rate and a 17% growth in its revenues between FY11 and FY15. It also reported a net profit of R63.60 crore in FY15 along with an operating profit margin of 28% in the same year.

Despite the benchmark indices losing nearly 5% during the year so far, primary markets continue to witness traction. In its IPO which opened last week, staff servicing company Teamlease had its shares subscribed over 66 times. Security solutions provider Quick Heal opened its public offer on Monday and was subscribed nearly 0.15 times in the first day.

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