VRL Logistics’ initial public offering (IPO) was subscribed 0.62 times on the first of the three-day offering.

The non-institutional category comprising of high net-worth individuals (HNIs) was subscribed 1.05 times. More than 36.46 lakh shares were bid against 34.67 lakh shares on offer, stock exchange data showed.

The institutional investors’ category was subscribed 0.36 times. Qualified institutional buyers (QIB) applied for 17.03 lakh shares against 47.11 lakh shares on offer. The retail book received 0.59 times demand. More than 47.76 lakh shares were bid against 80.90 lakh shares on offer.

People familiar with the matter told FE that first day response was encouraging despite the weak undertone in secondary markets on Wednesday and benchmark indices losing nearly 1% in last half an hour of trade.

More so, shares in the grey market – a pseudo over the counter market where IPO shares are bought and sold before officially listing on a stock exchange – were quoting at a premium of R75-90 to the price band.

VRL raised R140.36 crore on Tuesday by issuing shares to institutional investors in a pre-IPO placement. The company issued 68.46 lakh shares to anchor investors at R205 apiece, stock exchange announcement showed. The company has a set a price band of R195-205 per share.

Notable names include Morgan Stanley Mauritius (10.82 lakh shares), Abu Dhabi Investment Authority (5.85 lakh shares), Eastspring Investments India (5.85 lakh shares), Franklin India (5.85 lakh shares), ICICI Prudential AMC as well as Life Insurance (5.85 lakh shares), and Reliance Capital (3.9 lakh shares) among others.

The proceeds of the issue would be utilised for expanding the company’s existing fleet of goods transportation vehicles, repayment of loan and for other general corporate purposes. Out of the R117 crore raised through fresh issuance, VRL plans to purchase vehicles for R64 crore and repay its debt of R28 crore, the company said in its regulatory filing.

Post IPO, promoters’ stake will decline to 69-70%, while 25% would be held by public and remaining 5% would be held by investors.

HSBC Securities and Capital Markets, and ICICI Securities are financial advisors to the issue.

Subscription Details

NIIs subscribed 1.05x; over 36.46 lakh shares bid against 34.67 lakh shares on offer

Institutional investors subscribed 0.36x; 17.03 lakh shares bid against 47.11 lakh shares on offer

Retail book subscribed 0.59x; over 47.76 lakh shares bid against 80.90 lakh shares on offer

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