IRM Energy shares will be listed at the bourses today. The initial public offering (IPO) of the city gas distribution (CGD) company was subscribed 27.05 times. It received strong demand from qualified institutional buyers (QIBs) and non-institution investors (NIIs).
The company has fixed the IPO price at Rs 505 a share.
The grey market premium (GMP) is currently ₹37, said Shivani Nyati, Head of Wealth, Swastika Investmart Ltd. Still an early-stage company, it has a diversified customer portfolio, distribution network, and strong customer relationships, she said, adding “the IPO was priced fairly. Therefore, even in current market conditions, the IPO is likely to generate decent listing gains.”
The IPO received a good response from investors, who over-subscribed it 27 times.
The Rs 545.40-crore IPO received bids for 20.63 crore shares, against 76.25 lakh shares on offer. The category for NIIs was subscribed 48.34 times, while the portion for QIBs was subscribed 44.73 times and the retail investors’ portion 9.29 times.
The company, which is in the business of laying, building, operating, and expanding the city or local natural gas distribution network, came out with a price band of Rs 480-505.
The public issue of a face value of Rs 10 a share, is entirely a fresh issue of up to 1.08 crore equity shares. The offer included reservation for eligible employees, who enjoyed a discount of Rs 48 a share. The employees’ portion was subscribed two times.
The company intends to use about Rs 307.26 crore for funding capital expenditure requirements for the development of a city gas distribution network in Namakkal and Tiruchirappalli (Tamil Nadu), while Rs 135 crore will be used for prepayment or repayment of all or a portion of outstanding borrowings, and for general corporate purpose.
Anchor investors
As part of the IPO process, the company garnered Rs 160.35 crore from anchor investors by allotting 31.75 lakh shares at Rs 505 a share. Among the anchor investors were Quant MF, SBI General Insurance, HDFC Life, DSP MF, ITI MF, BOI MF, Nippon AIF and PNB Metlife.