Vadodara-based fruit drinks player Manpasand Beverages’ IPO was subscribed 36% on the second day of bidding. By the end of the day, Manpasand Beverages had received bids for 27.17 lakh shares against 75.86 lakh shares on offer. Manpasand Beverages is offering shares in the price range of INR290 -320 apiece. Investors can bid in lots of 45 shares.
Quite surprisingly, retail investors are attracted to the IPO which has been termed expensive by several analysts. Subscription in the retail category crossed 56% but non institutional investors (aka high networth investors) are staying away with subscription level in the category at just 5%. Qualified Institutional Buyers (QIBs) made bids for 18.45 lakh shares against 41.37 lakh shares on offer, resulting in subscription of 45%.
This is not uncommon for buyers to turn up on the last day of the IPO but non institutional investors’ absence is conspicuous. This makes the last day of bidding interesting which will decide if the IPO sails through or book running lead managers will be needed to do some adjustments. Earlier this year, IPO of Ortel Communications had to be reduced while Adlabs Entertainment IPO size lowered its IPO price following poor response in retail and HNI categories. Shares of Ortel Communications ([stock_quote symbol=”ORTEL” show=”” zero=”#000000″ minus=”#FF0000″ plus=”#448800″ nolink=”1″]) and Adlabs Entertainment ([stock_quote symbol=”ADLABS” show=”” zero=”#000000″ minus=”#FF0000″ plus=”#448800″ nolink=”1″]) opened lower on listing and are still trading at levels lower than their IPO rates.
|Manpasand Beverages Limited IPO Bidding (as on 25 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||1845180||0.45|
|2||Non Institutional Investors||2068966||94500||0.05|
|3||Retail Individual Investors (RIIs)||1379310||778230||0.56|
These are certainly not numbers to be proud of but the company has done well by roping in 11 anchor investors including Birla Sun Life Insurance, ICICI Prudential Life Insurance, BNP Paribas and Goldman Sachs India Fund, right before the IPO. Manpasand Beverages placed 56.25 lakh shares at a price of INR320 apiece to raise INR180 crore from anchor investors. Goldman Sachs India Fund and Birla Sun Life Insurance were the biggest buyers with 10.93 lakh and 5.75 lakh shares respectively.
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.
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.