The initial public offering (IPO) of Vadodara-based fruit drinks manufacturer Manpasand Beverages was fully subscribed on the final day of bidding. According to data available on NSE and BSE websites, Manpasand Beverages received bids for 1.05 crore shares against 75.86 lakh shares on offer. Manpasand Beverages offered shares in the price range of INR290 – 320 apiece in lots of 45 shares.
Maximum subscription was seen in the Qualified Institutional Buyers (QIBs) quota where investors bid for 82.13 lakh shares against 41.37 lakh shares available. This resulted in the subscription of 1.98 times in the category. Retail investors’ quota was also fully subscribed with investors making bids for 16.03 lakh shares. A total of 13.79 lakh shares were reserved for investors with application amount of less than INR2 lakh.
However, non institutional investors largely stayed away from the IPO, as indicated by the subscription of 0.38 times. The IPO was termed expensive by several analysts while acknowledging Manpasand Beverages’ high growth rates and the successful strategy of penetrating underserved rural and tier two markets.
Also Read: Plenty to like in Manpasand Beverages 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. The company’s net sales has shown a CAGR of 85.29% from fiscal 2012 to fiscal 2014, while EBITDA and profit after tax has shown a CAGR of 78.63% and 83.68% 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.
On 23 June – a day before the IPO opened for all investors – Manpasand Beverages placed 56.25 lakh shares with 11 anchor investors worth INR180 crore. Anchor investors including Birla Sun Life Insurance, ICICI Prudential Life Insurance, BNP Paribas and Goldman Sachs India Fund, among others, purchased shares at the price of INR320 apiece. Goldman Sachs India Fund and Birla Sun Life Insurance were the biggest buyers with 10.93 lakh and 5.75 lakh shares respectively, although SBI and ICICI Prudential were also among big buyers through their various mutual fund schemes.
|Manpasand Beverages Limited IPO Bidding (as on 26 June 2015)|
|Sr.No.||Category||No. of shares offered||No. of shares bid for||No. of times of total|
|1||Qualified Institutional Buyers (QIBs)||4137931||8213040||1.98|
|2||Non Institutional Investors||2068966||783135||0.38|
|3||Retail Individual Investors (RIIs)||1379310||1603125||1.16|
Hot IPO market
Soaring stock markets have propelled several companies to bring their IPOs this year. Manpasand Beverages is the eighth company to tap primary markets this year. Prior to it, Ortel Communications, Adlabs Entertainment, Inox Wind, VRL Logistics, MEP Infrastructure Developers, UFO Moviez India, and PNC Infratech had launched their IPOs, raising a cumulative INR3,445.6 crore in the process. However, Inox Wind and VRL Logistics are the only IPOs which have offered decent returns to investors as several of the remaining stocks are still trading below their offer price despite the fantastic rally in the last two weeks.
Manpasand Beverages is largely known for its Mango Sip brand which is sold in 23 states across India through 54 consignee agents and 472 distributors. The company plans to expand its distribution reach to all 29 states and even plans to expand overseas by opening a facility in Dubai, although that is part of a long term plan. Currently, it operates three manufacturing facilities in Vadodara, Varanasi and Dehradun.