Coffee Day Enterprises Limited (CDEL) initial public offering (IPO) received a subscription of 1.8 times on its final day of bidding. The holding company of popular Cafe Coffee Day (CCD) chain of coffee outlets eyed raising INR11.5 billion from this issue with price band of INR316-328 per share. In total, bids for 47 million shares were received against net issue of 25.8 million shares offered as on 8 PM, according to data from the exchanges.
Maximum subscription was received from qualified institutional buyers’ category (4.4 times) with bids for 32.38 million shares against 7.38 million shares offered. However, Retail Investor and Non Institutional Investor (NII) categories remained undersubscribed while shares reserved for employees were also not fully subscribed.
|Coffee Day Enterprises’ IPO Bidding (as on 16 October 2015)|
|S.No.||Category||No. of shares offered||No. of shares bid for||SubscriptionNo. of times|
|1||Qualified Institutional Buyers (QIBs)||7,380,654||32,384,880||4.39|
|2||Non Institutional Investors||5,387,658||2,920,050||0.54|
|3||Retail Individual Investors (RIIs)||12,571,203||11,363,220||0.90|
The company raised INR3.34 billion after allotting 10.38 million shares to 17 anchor investors including Merrill Lynch Capital Markets Espana SA SV, Platinum Asia Fund, Axis Mutual Fund, ICICI Prudential and National Westminster Bank at a price of INR322 per share. Prominent investors in the company include New Silk Route and KKR while Bennett Coleman & Company Limited (BCCL), Rakesh Jhunjhunwala and Ramesh Damani also hold small stakes.
Over-subscription for the IPO contrasts with mixed recommendations from analysts who highlighted a diversified business structure and unprofitable operations as key risks.
Kotak Investment Banking, Citigroup, Morgan Stanley, Axis Capital, Edelweiss and Yes Bank are handling the issue. Coffee Day listing is one of the biggest the Indian market has witnessed since Bharti Infratel Limited got listed in December 2012 through INR41.55 billion IPO.
Cafe Coffee Day initiated its coffee business in 1996 and at present it leads the local market with 1,538 cafes across 219 Indian cities. The company plans to use the proceeds for financing its subsidiary, Coffee Day Global Limited (CDGL), setting up new outlets and kiosks, manufacturing and assembling vending machines, revamping existing outlets, setting-up roasting plant facility, prepayment of loans and for general corporate purposes.
Other upcoming issues include InterGlobe Aviation, Essel Infra, Alkem Laboratories, SHCIL, Infibeam, Parag Milk Foods, Maini Precision Products, GVR Infra Projects, L&T Infotech and GNA Axles, to name a few.