Agra-based PNC Infratech listed on the bourses today with a slight gain to its issue price but failed to hold its ground. The stock opened at INR387 apiece on the National Stock Exchange (NSE) against the issue price of INR378 per share. However, this was the highest point of the trade as selling pressure settled in pretty soon. Shares touched a low of INR346.4 apiece before closing the day at INR361, marking a decline of 6.7% from the day’s high point. The closing price reflects a loss of 4.5% over the issue price. Broader markets were also lackluster during the day as the CNX Nifty lost 31 points or 0.4% to close at 8,339.
The company raised INR488 crore by offering 1.29 crore shares to investors in its IPO earlier this month. Although the company roped in several mutual funds as anchor investors, the IPO saw a muted response from HNI and retail categories with subscription of 0.65 times and 0.28 times respectively. This under subscription from the key categories earned the IPO a red flag from IPO Central. One of the issues keeping investors at bay is the highly leveraged balance sheet of the company.
This is something the company is trying to address and it plans to use INR35 crore from the issue towards reducing debt. Out of the total, PNC Infratech plans to use INR150 crore for working capital while INR103 crore will be used on equipment. The offer comprised a fresh issue to the public of up to 1.15 crore equity shares by the company and an offer for sale of up to 14.21 lakh shares by Jacob Ballas India. Jacob Ballas invested INR150 crore in the construction company for 25% stake.
PNC Infratech specializes in construction of highways, bridges, runways, flyovers and airports. The company has projects in Rajasthan, Punjab, Haryana, Uttarakhand, Uttar Pradesh, Delhi, Bihar, West Bengal, Assam, Madhya Pradesh, Maharashtra, Karnataka and Tamil Nadu. The book running lead managers to the offer were ICICI Securities and IDFC Securities.