Trading in shares of MEP Infrastructure Developers started today on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on a weak note. The stock listed at the issue price of INR65 per share at the NSE but soon started its downward journey and touched a low of INR52.8 before finishing the day at INR58.4 per share. The performance on the BSE wasn’t very different either.
Last month, the toll management company had raised INR324 crore through its initial public offer (IPO) that was subscribed 1.1 times. The IPO got a lukewarm response and remained undersubscribed in the retail category. Participation from institutional investors, including anchor investors Tata Mutual Fund and HDFC Mutual Fund, helped the IPO to sail through. Investors were spooked by high debt and losses of the company.
MEP Infrastructure Developers claims to operate toll plazas at 47 locations in 9 states and aims to use the IPO proceeds to retire some of its debt. As of January 2015, the company had a debt of INR2,800 crore. MEP Infrastructure Developers posted a loss of INR143 crore in financial year 2013/14.