PNC Infratech IPO manages to sail through, HNIs and retail investors give it a miss


PNC-Infratech-logoThe initial public offer (IPO) of Agra based PNC Infratech was fully subscribed on the final day. The company received bids for 1.39 crore shares against 90.6 lakh shares on offer. This translates into an oversubscription of 1.56 times. However, the figures may be misleading as the issue was salvaged by institutional buyers while retail investors and high networth individuals (HNI) gave it a miss. The issue saw a subscription of just 0.28 times in the retail category while subscription in the Non Institutional Investors (aka HNI) portion was limited to just 0.65 times. Qualified Institutional Buyers (QIBs) category was oversubscribed 4.51 times.

The issue was aimed at raising as much as INR488 crore through its IPO, priced in the range of INR355 to INR378 per share. Thankfully, the company had allotted 38.6 lakh shares to anchor investors at INR378 per share last week, aggregating to approximately around INR146 crore. Goldman Sachs India, HDFC Trustee Company, Birla Sun Life Trustee Company, DSP Blackrock India, Reliance Capital Trustee Company, Reliance Mutual Fund, L&T Mutual Fund, Sundaram Mutual Fund and Kotak Mutual Fund are among the anchor investors.

PNC Infratech became the seventh company to tap primary equity market this year. Prior to PNC Infratech, UFO Moviez India, MEP Infrastructure Developers, VRL Logistics, Inox Wind, Adlabs Entertainment and Ortel Communications raised funds through IPOs in 2015.

PNC Infratech Limited IPO bidding (as on 12 May 2015)
Category No.of shares offered No. of shares bid for No. of times of total
Qualified Institutional Buyers (QIBs) 2574342 11599980 4.51
Non Institutional Investors 1930757 1256815 0.65
Retail Individual Investors (RIIs) 4505098 1240015 0.28
Employees 50000 55685 1.11
Total 9060197 14152495 1.56

Source: NSE

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 are ICICI Securities and IDFC Securities.


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