Parag Milk Foods Limited (Parag) which had tapped the capital markets with its simultaneous offer to sell of 2.05 cr shares and fresh issue to raise Rs 300 crs in a price band of Rs 220-227 was subscribed. The company had opened the issue on Wednesday the 6th of May and it was to close on Friday the 8th of May but fell short of the 75% compulsory QIB subscription. The issue was extended with the lower price reduced to Rs 215 and the upper price remaining the same at Rs 227. The new band thus became Rs 215-227 and the issue would close on Wednesday the 11th of May.
The company allotted 1.26 cr shares to 17 anchor investors comprising of 22 entities at Rs 227. The striking part of the anchor allotment was that there were no domestic institutions or mutual funds other than Tata which was allotted over 23% of the total issue.
The book has been overall subscribed 1.83 times. The QIB portion which is subscribed 1.15 times is again dominated by FII’s while domestic funds and institutions remain small investors. This sure is intriguing and one would have to see post listing the rationale of the same.
Details of the subscription are given below:-
| Bucket Size | Shares Applied for | Times oversubscribed | |
| QIB | 10628960 | 12266930 | 1.15 |
| HNI | 5146578 | 15834195 | 3.08 |
| Retail | 3431052 | 7283510 | 2.12 |
| Employees | 300000 | 307320 | 1.02 |
| Total | 19506590 | 35691955 | 1.83 |
The fact that the QIB book has been subscribed by FII’s primarily and some of them who are anchor investors, it appears that the management may be forced to price the issue at the top end of the band at Rs 227. While this may appear unfair to most investors and market intermediaries it would certainly benefit the selling shareholders and the management. Let us keep our fingers crossed for the listing of the company in a week’s time from now.
