Navkar Corporation IPO subscribed 2.9X despite HNI undersubscription


Navkar Corporation’s IPO, which aimed to raise INR600 crore, received strong subscription on the final day of bidding, with total subscription of 2.9 times despite weakness in the secondary market. Data available with NSE and BSE at 7:30 PM showed investors had placed bids for 8.15 crore shares on the last day. The Raigad-based company offered a total of 2.85 crore shares in the net offer, excluding the anchor investor portion. The IPO was priced between INR147 per share and INR155 per share.

Navkar Corporation

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However, these figures were largely driven by Qualified Institutional Buyers (QIBs) which bid for 5.28 crore shares against 81.6 lakh shares available reserved for the category. This resulted in a subscription of 6.5 times in the category.

Retail investors also showed keen interest and placed bids for 2.33 crore shares, leading to a subscription of 1.6 times in the category.

However, the Non Institutional Investor (NII) category remained undersubscribed with bids received for a total of 54.86 lakh shares against 61.22 lakh shares on offer. It is not abnormal for NIIs to bid on the last day of IPOs but the category’s undersubscription could be due to the volatility in stock market.

Navkar Corporation IPO Bidding (as on 26 August 2015, as on 7:30 PM)

Sr.No. Category No. of shares offered No. of shares bid for No. of times subscription
1 Qualified Institutional Buyers (QIBs) 8163266 52842325 6.5
2 Non Institutional Investors 6122449 5486250 0.9
3 Retail Individual Investors (RIIs) 14285714 23316230 1.6
Total 28571429 81644805 2.9

Last Friday, Navkar Corporation raised INR180 crore by placing 1.16 crore shares with a clutch of anchor investors. The company attracted some prominent names including Abudhabi Investment Authority, Morgan Stanley Investment Mauritius, and Nomura as anchor investors.

Out of the INR600 crore, Navkar Corporation will receive INR510 crore while the remaining will go towards existing shareholders which participated in the IPO. The company plans to use IPO proceeds towards capacity enhancement of the Somathane container freight station (CFS), development of the non-notified areas of CFSs and establishment of a logistics park at Valsad in Gujarat. INR314.56 crore will go towards the new logistics park at Valsad, near Vapi. Nearly INR144.53 crore will be used to expand capacity of Somathane CFS facility while another INR54.25 crore will be used to develop certain non-notified areas near its three CFSs in Panvel for additional parking facilities and drive-ways which is expected to increase its container handling capacity.


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