Tepid listing: Mishra Dhatu Nigam share price falls 3% to Rs 87 on stock market debut

By: | Published: April 4, 2018 11:24 AM

Hyderabad-based state-run defense company made a tepid debut on Wednesday, as shares of Mishra Dhatu Nigam (Midhani) listed at a 3% discount to Rs 87 on BSE as compared to issue price of Rs 90.

Mishra Dhatu Nigam share price falls 3% on listing.Mishra Dhatu Nigam (Midhani) IPO, which was open for subscription between 21-23 March got subscribed by 1.2 times even as institutional investors subscribed nearly 1.91 times their portion. (Image: Reuters)

Hyderabad-based state-run defense company made a tepid debut on Wednesday, as shares of Mishra Dhatu Nigam (Midhani) listed at a 3% discount to Rs 87 on BSE as compared to issue price of Rs 90. The IPO, which was open for subscription between 21-23 March got subscribed by 1.2 times even as institutional investors subscribed nearly 1.91 times their portion.

Earlier, the Mishra Dhatu Nigam issue had fixed a price band of Rs 87-90 per equity share. The company had expected to raise about Rs 438.38 crore. The company had offered a discount of Rs 3 per equity share on the offer price for retail investors and eligible employees. The bid lot was fixed at 150 shares, implying that bids could have been made for 150 equity shares, followed by multiples of 150 shares.

Most brokerages had earlier recommended investors to subscribe to the issue given the company’s positioning in the market.  Brokerage firm IIFL said that the company is in a sweet spot given the expected surge in demand and its tie-ups with major producers. According to the firm, FY18 performance is expected to be subdued due to shutdown of key plant for upgradation and maintenance.

Mishra Dhatu Nigam (Midhani) has continuously reported profits in the last five fiscal years. Notably, Mishra Dhatu Nigam has earned a PAT  (Profit After Tax) of Rs 273.01 million on a total revenue of Rs 2,206.61 million for the six months period ended September 30, 2017, according to the company’s prospectus.

The state-run player was established in 1973, with an aim of achieving self-reliance in research, development and supply of critical alloys and products of national security and strategic importance. It manufactures advanced metallurgical products of special metals and superalloys in India. Further, as per its prospectus Mishra Dhatu Nigam achieved the status of a Mini Ratna, Category-I company in 2009.

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