Parag Milk Foods Limited (Parag) which had tapped the capital markets with its twin issues debuted and reported strong gains at the end of the day. The company had raised Rs 300 crs from a fresh issue and an offer for sale of 2.05 cr shares in a price band of Rs 220-227. The company allotted 1.51 cr shares to 17 anchor investors comprising of 22 entities at Rs 227 which was the top end of the price band. The issue which had to raise 75% of the total issue from QIB’s compulsorily failed to do so at the end of the three days that the issue was open. The issue was extended by three days and the issue price band revised to Rs 215-227.

In the second attempt anchor investors have also apparently put money and the issue was adequately subscribed. A couple of names that are apparent from the shareholding pattern show that Nomura has subscribed to 6.86 lakh shares over and above the 28.89 lakh shares in the anchor book. Similarly Quantum fund M has subscribed to an additional 11.11 lakh shares in the issue over and above 8.44 lakh shares as anchor. What beats me is what went wrong where after having such an impressive anchor book a mere Rs 120 crs could not be collected from QIB’s. What followed was most unfortunate where all sorts of assumptions were made. Without going into the reasons and explanations it is quite clear that it is a lesson or case study of what not to do in future.

Coming to the listing day itself the discovered price was Rs 215.70 on the BSE and Rs 217.50 on the NSE. These were also the low of the day on the respective exchanges. The high of the day was Rs 250 on the BSE while it was Rs 249.70 on the NSE. The close was around the highs and closed at Rs 247.80 on BSE and Rs 247 on the NSE. Traded volume combined was 236.84 lakh shares which was 69% of the IPO size and 1.22 times the non-anchor portion. Delivery percentage was 15.44% of the IPO size and 27.45% of the non-anchor portion. This indicates that the intraday trades was very heavy and there was a speculative bias considering the fact that the issue had been extended.

On the institutional front there were three trades reported with two on the sell side and one on the buy side. There was a cross deal reported between Macquarie Emerging Markets who sold 6,38,084 shares and the same was bought by India Opportunities Growth Fund at Rs 239.10. The other trade reported was by Quantum Fund which sold 4,52,000 shares at Rs 240.55.

The share has made decent returns far in excess of expectations after a stormy and torrid time during the issue’s subscription period. It remains to be seen how the share performs hereafter and particularly when it declares results for the quarter and year ended March 2016.

Currently one thing is for sure that history of the market of such issues is not in favour of Parag and it would have to pull out more than a rabbit from the hat to re-write history.