Prince Pipes and and Fittings IPO to raise up to Rs 500 crore was subscribed about 28% as at the end of first day of bidding, backed by strong demand from retail investors.
Prince Pipes and and Fittings IPO to raise up to Rs 500 crore was subscribed about 28% as at the end of first day of bidding, backed by strong demand from retail investors. The issue saw bids for 54.41 lakh shares as against the 1.97 crore shares, implying a subscription of nearly 28 per cent. Retail investors bid for more than 50 lakh shares on the first day of issue, and their portion was subscribed about 52%. Non-institutional investor portion registered a demand of about 3%, while QIBs had bid for about 5% of the portion reserved for them. With more than 30 years of experience in the industry, Prince Pipes is one of the leading polymer pipes and fittings manufacturers in India with 5% market share. It is an end-to-end polymer piping systems solution provider, operating under two strong brands – Prince Piping Systems and Trubore.
Prince Pipes IPO involves a fresh issue worth Rs 250 crore and and offer for sale of Rs 250 crore. Prince Pipes has set a price band of Rs 177-178 per share. The minimum bid lot has been fixed at 84 shares and in multiples of 84 shares thereafter. The OFS would result in promoters’ stake reducing from 90% to 65.8% post-IPO. Promoter Jayant Shamji Chheda is selling about Rs 20 crore; while Rs 140 crore worth of shares by are being sold by Tarla Jayant Chheda; Rs 50 crore worth of shares by Parag Jayant Chheda; and Rs 40 crore worth of shares by Vipul Jayant Chheda. The company will not receive any proceeds from the offer for sale.
While investors maybe considering to invest in the issue, leading brokerages say that Prince Pipes could be a good bet. “The issue is priced at 23.5x FY19 EPS (fully diluted). While there are concerns on Promoter’s pledge and related party transactions, valuations seems reasonable vis-à-vis peers, given its financials and return ratios. Hence, investors can Subscribe the IPO from a listing gains perspective,” Motilal Oswal said in its IPO report. “Post issue on the expanded shareholding, the valuation works to 23.41X to 23.54X the earning per share. On FY21 basis, the stock is trading at 16X price earning multiple. We recommend a subscribe for listing gains,” said Ventura Securities.