Shares of Manpasand Beverages listed today on BSE and NSE on a weak note but recovered subsequently. On NSE, the stock listed at INR300 per share, down over 6% from the allotment price of INR320 per share. Selling pressure intensified soon after the listing and the stock touched a low of INR285.7 per share in the subsequent hours. However, buying emerged later and the stock recovered to touch a high of INR342.6 per share. Shares of Manpasand Beverages closed the day at INR326.1 apiece, reflecting a marginal gain of 1.9% over the allotment price. The situation wasn’t very different on BSE where the stock closed at INR326.9 per share after opening at INR291 and touching a low of INR286. Despite closing price above the allotment level, the listing is only a borderline success as several investors may have sold in initial hours at rates below the allotment price.
The Vadodara-based company raised INR400 crore through its IPO by selling 1.25 crore shares in the price range of INR290 -320 apiece. The IPO was subscribed 1.98 times and 1.16 times in the Qualified Institutional Buyer (QIB) and retail categories respectively. However, Non Institutional Investors (NIIs) stayed away from the IPO as indicated by the subscription of only 0.38 times. The company has succeeded in raising INR400 crore through the issue, according to its draft prospectus despite the under-subscription in the NII category. SEBI allows companies to plug the shortfall in retail and NII categories by issuing more shares to QIBs. Based on the data available with NSE, the issue was subscribed 1.4 times. However, the company decided to reduce the IPO size to 1.25 crore shares against the 1.32 crore shares offered earlier. Out of the total, the company allotted 56.25 lakh shares to anchor investors.
While acknowledging Manpasand Beverages’ high growth rates and the successful strategy of penetrating underserved rural and tier two markets, several analysts termed the IPO expensive. The company counts SAIF Partners and Aditya Birla Private Equity among its investors, although the investors did not sell their shares in the IPO. Established in fiscal 2010, the company has moved fast to achieve revenues of INR294.3 crore in fiscal 2014. Part of its success lies in the strategy to tap the under-penetrated rural markets and also, leverage the growing consumer preference for healthier beverages, especially in urban markets.
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Manpasand Beverages’ net sales have shown a CAGR of 85.29% from fiscal 2012 to fiscal 2014, while EBITDA and profit after tax have shown CAGR of 78.63% and 83.68% respectively during the same period. In line with its growth strategy, the company plans to boost its annual revenues to INR1,000 crore by March 2016.