Godrej Agrovet Limited – Debuts with gains of over 29%

Shares of Godrej Agrovet Limited listed the bourses and had a stellar debut gaining over 29%. The company had launched its IPO which consisted of a fresh issue of Rs 291.51 crs and an offer for sale of Rs 300 crs by the parent and 1.23 cr shares by the PE Investor.
godrej-agrovetThe company had earlier allotted 74.17 lakh shares to 25 anchor investors comprising of 32 entities.

The issue had received excellent response and was oversubscribed over 95 times. The QIB portion was subscribed 150.96 times, HNI 236 times and retail 6.7 times.

The scrip opened for trading at Rs 621 on the BSE and Rs 615.60 on the NSE. The high was Rs 629.85 and Rs 630 respectively while the lows were Rs 563.80 and Rs 563.40. The share closed at Rs 595.55, a gain of Rs 135.55 or 29.47% on the BSE. The close on the NSE was Rs 595.65, a gain of Rs 135.65 or 29.49% on the NSE.

Exchange Open High Low Close Net Change % Gain/ Loss Wt.Avg Volume Delivery Del %age
BSE 621.00 629.85 563.80 595.55 135.55 29.47 599.93 3677215 1029433 27.99
NSE 615.60 630.00 563.40 595.65 135.65 29.49 600.53 24000049 8422033 35.09
Total 27677264 9451466 34.15

The traded volume was 276.77 lakh shares which was 1.10 times the IPO size of 251.58 lakh shares. The delivery volume was 94.51 lakh shares which was 34.15% of the traded volume and 37.57% of the IPO size. Considering the non-anchor portion the delivery percentage was 53.27% of the IPO.
A successful IPO and decent listing where all successful applicants have made money.

Diwali is here

NIFTY hit a lifetime high while BSESENSEX is about 250 points away during course of trading last week. India celebrates Diwali this Thursday and Friday and markets have already begun celebrating. Mood is optimistic and there is momentum as well. A note of caution needs to be observed as results and performance do not match the exuberance being witnessed.

TCS declared results which were better than what the street expected, however on comparison they were flat. Reliance Industries declared an excellent set of numbers and heartening was the fact that ‘Jio’ has made cash profit. The entire market results would certainly not follow the above trend.

The primary market saw two issues open for subscription last week. The first was from IEX or India Energy Exchange which had confusion about the subscription by FPI’s in the IPO. The anchor allotment had to be cancelled to these FPI’s and the same was added back to the QIB category. There was an exit route given to other shareholders to allow them to withdraw their application of they so decided. The issue was subscribed 2.28 times overall with QIB portion subscribed 2.56 times, HNI undersubscribed at 0.85 times and Retail subscribed 2.61 times. One wonders at the callous attitude of merchant bankers and they are taking such big calls on mere interpretations. If foreigners cant invest in a primary offering whether it is by way of an offer for sale or fresh issue is running to fine a line and risks the wellbeing of the issue.

The other issue for subscription last week was the mega insurance issue from GIC RE. The issue was subscribed 1.36 times with QIB portion subscribed 2.25 times, HNI undersubscribed at 0.22 times and Retail undersubscribed at 0.63 times. The size of the issue was over Rs 11,000 crs. There were 6.56 lakh applications and the average subscription in the retail category was about Rs 39,000 against a normal average of closer to Rs 18-20k.

With the IPO of GIC RE over, the last month or so has seen three issues in the insurance space and collectively they have raised about Rs 25,000 crs. The two other issues were from ICICI Lombard and SBI Life insurance. Two more issues are waiting on the side-lines with New India expected to hit the markets in early November and Reliance General Insurance in the second half of November.

Two IPO’s would debut this week with Godrej Agrovet listing on Monday and MAS Financial Services Ltd listing on Wednesday. Both issues had received excellent response and were very well subscribed. They should list with gains of around 25-30% over the issue price which incidentally is almost identical at Rs 460.

There is a trading holiday on Thursday and Friday for Diwali. There would be a special ‘Muhurat’ session held on Thursday for welcoming the new Hindu calendar Samvat 2074. It would begin with a bang irrespective whether fireworks are banned or not. Enjoy Diwali and the fireworks but be cautious as valuations have literally gone through the roof.

Wishing all readers a Happy Diwali and a Prosperous New Year.

GIC RE Issue Subscribed 1.38 Times

The largest IPO so far in the calendar year from state run GIC General Insurance Company Limited was subscribed. The company had launched its issue comprising of a fresh issue and offer for sale of 12.47 cr shares in a price band of Rs 855-912. Retail investors and eligible employees were entitled to a discount of Rs 45 per share. The issue received decent response from QIB’s and from retail investors.

The overall issue was subscribed 1.38 times with the QIB portion subscribed 2.25 times. HNI was undersubscribed at 0.22 times primarily because of the retail discount and grey market quoting at a discount because of the same. Retail subscription was at 0.63 times. A total of 6.56 lakh applications were received which means the retail issue was subscribed 0.24 times in terms of lots. This effectively means that the average subscription per form in the retail category was 2.62 lots or 39 shares. This is significantly higher where the average application by retail hovers around 1.5 lots.

There is talk that the issue may not be priced at the top end of the band and may happen somewhere midway. If that is done there would be significant movement when the share lists post Diwali.

The details of the subscription are given below: –

GIC RE Subscription

Bucket Size Shares applied for Times oversubscribed
QIB 62277900 140024464 2.25
HNI 18683371 4108336 0.22
Retail 43594532 27594768 0.63
Employee Reservation 144197 135568 0.94
Total 124700000 171863136 1.38
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