NEW DELHI: Despite volatility in the stock market, demand for public issues remained robust as all the four initial public offerings (IPOs) whose subscription period ended on Thursday were oversubscribed multiple times.
While the IPO of Credo Brands Market Limited was subscribed 52 times, the initial offering of Happy Forging Limited was booked 82 times on the final day of bidding. Not only overbooked, the two IPOs are commanding a premium of 45-50% in the grey market, indicating strong listing gains.
As per the data available on the BSE, Credo Brands IPO’s non-institutional investors (NIIs) portion was subscribed 55.52 times while the qualified institutional buyers (QIBs) portion was subscribed nearly 105 times. The retail quote was booked nearly 20 times. Credo, which owns the denim brand Mufti, is aiming to raise Rs 549.78 crore from this public issue, which is completely OFS (offer for sale) in nature.
For Happy Forging (HFL), the QIB portion was booked over 220 times while the NII portion was oversubscribed 62.17 times. The retail portion was subscribed about 15 times. The forging company aims to raise Rs 1,008.59 crore from its initial offer. Geogit Financial in a recent note said that HFL has consistently shown revenue growth and profitability, with revenues increasing from Rs 585crore in FY21 to Rs 1196.5 crore in FY23 at a CAGR of 43% and profits growing from Rs 86.4 crore to Rs 208.7 crore at a CAGR of 55% during the same period.
“At the upper price band of Rs 850, HFL is available at a P/E of 33.6x (FY24 annualised), which seems in-line compared to its peers. Considering the company’s well-established standing in the crankshaft manufacturing industry, notable customers, solid financials, varied product range, global reach with future strategic acquisitions and expansion plans, and new customer additions, we recommend a ‘Subscribe’ rating for the issue on a medium- to long-term basis,” the brokerage firm said.
The IPO of RBZ Jewellerz was overbooked 16.86 times while the IPO of Shanti Spintex was booked 27.38 times. IPO market is buzzing with new entrants as many companies are confident of raising funds via this route amid a sharp rally in the stock market.
Overbooked IPOs
RBZ Jewellers Ltd
Oversubscribed: 16.86 times
Happy Foreign Ltd
Oversubscribed: 82.04 times
Credo Brands Ltd
Oversubscribed: 51.85 times
Shanti Spintex
Oversubscribed: Data yet to come