Shares of Gandhar Oil Refinery (India) Ltd, the heartthrobs of investors, will be listed at the exchanges on Thursday. The company has fixed price at ₹169 at the upper end of price band ₹160-169.,
The issue was subscribed over 64 times as all category of investors poured in money. The ₹501-crore issue comprised a fresh issue of shares worth ₹302 crore and an Offer for Sale (OFS) of 1.17 crore shares worth ₹198.69 crore by promoters and existing shareholders. Those offered shares in the OFS include promoters -- Ramesh Babulal Parekh, Kailash Parekh, and Gulab Parekh -- and other shareholders, Fleet Line Shipping Services LLC, Denver Bldg Mat & Décor TR LLC, and Green Desert Real Estate Brokers.
The portion for non-institutional investors got subscribed 62.2 times while the category for Retail Individual Investors (RIIs) attracted 29 times subscription. The quota for Qualified Institutional Buyers (QIBs) received 129 times subscription.
Rajan Shinde, Research Analyst, Mehta Equities Ltd, said Gandhar Oil received a better than expected subscription demand mainly on the back of reasonable IPO valuation when compared to its peers which are trading high. The company has a scalable business model and enjoys a dominant market share with a niche product portfolio of 440 products catering to diverse consumers and healthcare worldwide.
Ahead of the issue, Gandhar Oil Refinery (India) Ltd had raised a ₹150.20 crore from anchor investors, who included Morgan Stanley Asia (Singapore) Pte, Copthall Mauritius Investment Ltd, Societe Generale, SBI General Insurance Company, Aditya Birla Sun Life Insurance Company, ICICI Prudential Mutual Fund (MF), HDFC MF, and WhiteOak MF.
Proceeds from the fresh issue component will be used for payment of debt and for the purchase of equipment and civil work required for expansion in the capacity of automotive oil at the Silvassa plant. In addition, the funds will be utilised for expansion in capacity of petroleum jelly and accompanying cosmetic product division at the company’s Taloja plant as well as expansion in capacity of white oils by installing blending tanks at the plant and funding working capital requirements.
“We believe a healthy listing gain between 30-40 per cent is possible against the issue price of ₹169 a share, giving a good room for listing gains due to valuation gap between listed peers and Gandhar Oil. We think the company has created a niche place in white oil and serves diversified industrial users which gives the company an edge over its peers in the segment,” he said and adding that at “Based on above assumptions we recommend allotted investors to book listing day profits over and above our expectations. Considering limited upside post listing, investors who failed to get allotments in the public offer can accumulate Gandhar Oil on dips post listing.”
Gandhar Oil Refinery is a leading manufacturer of white oils with a growing focus on the consumer and healthcare end industries. It offers over 440 products primarily across the personal care, healthcare and performance oils (PHPO), lubricants and process and insulating oils (PIO) divisions under its Divyol brand
Nuvama Wealth Management and ICICI Securities are the book-running lead managers to the IPO.