GNA Axles listing cheered IPO investors as trading started at INR252 per share, indicating a premium of 21.7% on the IPO allotment price of INR207 per share. At 12 PM, the stock was trading at INR250 per share on the NSE, down slightly from its opening price on the first day of listing, but still up 20.7% from the IPO price. The stock had touched an intraday high of 261.8 per share and a low of INR242.2 by 12 PM.
The IPO raised INR130 crore by selling 6,300,000 shares at the upper end of the price band of INR205-207 per share. GNA Axles IPO, which was open for subscription between 14 and 16 September, received strong demand for shares and the offer was subscribed 54.19 times.
The family-owned company, which supplies rear axle shafts for on-highway and off-highway vehicles, plans to use IPO proceeds for acquiring plant and machinery, meet working capital requirements and general corporate purpose. In its red herring prospectus (RHP), the company said it plans to use INR80.07 crore (INR800.7 million) for purchasing plant and machinery while INR35 crore (INR350 million) will be used to fund working capital requirements.
The Jalandhar-based company counts John Deere, Mahindra & Mahindra (M&M), Tractors and Farm Equipment Limited (TAFE) among its OEM customers, although it also supplies to tier-1 suppliers such as Automotive Axles Limited, Meritor HVS AB and Dana Limited.
GNA Axles IPO attracted premium in grey market trades which indicated to positive listing. GNA Axles’ strong listing is in line with our assessment of the positives with the company while also downplaying the concerns regarding listing in T Group. Trading in securities in the T Group is settled on a trade-to-trade basis. As a result, listing in T Group generally keeps volumes restricted and impacts the price movement. GNA Axles will be in Trade-for-Trade segment for 10 trading days.
Good for Endurance Technologies
Strong GNA Axles listing IPO will be positive for Endurance Technologies which is planning to sell 24,613,024 shares through its upcoming IPO. Private equity investor Actis holds 19,295,968 shares or 13.7% equity stake in the company and will be selling its entire shareholding in the IPO.