The IPO of SH Kelkar was fully subscribed on the second day with second demand coming from institutional investors. At the end of second day, the IPO received bids for 37.15 million shares against the total of 20.2 million shares available. This means the IPO received subscription of 1.84 times.
The Mumbai-based fragrance and flavour company is selling shares in the price range of INR173 – 180 per share in the IPO.
A compilation of data available from BSE and NSE shows subscription was highest among QIBs who placed bids for 27.5 million shares, leading to the category subscription of 4.68 times. Subscription in the NII or HNI category was also good at 1.14 times. Retail investors subscribed to 47% of their portion with bids of 4.69 million shares.
|SH Kelkar IPO Bidding (as on 29 October 2015)|
|S. No.||Category||Shares offered||Shares bid for||Subscription no. of times|
|1||Qualified Institutional Buyers (QIBs)||5,882,397||27,525,280||4.68|
|2||Non Institutional Investors (NIIs)||4,305,583||4,925,280||1.14|
|3||Retail Individual Investors (RIIs)||10,046,362||4,698,240||0.47|
SH Kelkar’s IPO subscription is good since the IPO was competing with the INR30 billion mega offer of InterGlobe Aviation which has consumed substantial liquidity. Ahead of the IPO, SH Kelkar raised INR1.52 billion from anchor investors by placing 8.47 million shares at INR180 each with domestic mutual funds and foreign institutional investors. Apart from raising cash for debt reduction, the IPO will offer a partial exit to private equity investor Blackstone – the biggest shareholder in the company.
Most brokerage house have placed positive recommendations on SH Kelkar’s IPO while highlighting that valuations are rich. Since the market has rewarded high performers this year even with excessive valuations in the case of Manpasand Beverages, there appears to be is a strong case to apply in SH Kelkar IPO for listing gains as well as for long term investment.