Wednesday, May 18, 2022
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Shriram Properties IPO Subscribed 89% on On Day 1: Should You Invest?

Shriram Properties IPO comprises fresh issuance of equity shares worth Rs 250 crore and an offer for sale of Rs 350 crore. The price band for the offer is Rs 113-118 per share.

Shriram Properties IPO Subscribed 89% on On Day 1: Should You Invest?

The initial public offer of Shriram Properties attracted 89 per cent subscription on the first day of the offer on Wednesday.

The quota for the Retail Individual Investors (RIIs) was subscribed 4.85 times. The realty player is the 57th company to come out with an Initial Public Offer (IPO) so far this calendar year.

The latest data available on the BSE showed that for 2,93,51,639 shares of the company on offer, bids were received for 2,60,79,375 shares, which translates to a subscription of 89 per cent.

For the RII category, there were bids for 2,56,48,125 shares against 52,83,185 shares on offer.

The category for the non-institutional investors got 4 per cent subscription and that for employees has subscribed 36 per cent. The qualified Institutional Buyers (QIBs) portion did not receive any bids on the first day.

On Tuesday, the company mopped up a little over Rs 268 crore from anchor investors.

The public issue comprises fresh issuance of equity shares worth Rs 250 crore and an offer for sale of Rs 350 crore. The price band for the offer is Rs 113-118 per share.

The net proceeds from the fresh issue towards repayment and/ or pre-payment of debt and general corporate purposes.

About 75 per cent of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors, and the remaining 10 per cent for retail investors.

Before heading into the IPO, Shriram Properties raised over Rs 268 crore (Rs 2,68,64,99,982) from 34 anchor investors in lieu of 2,27,66,949 equity shares at Rs 118 each, reported The Indian Express, citing data from the stock exchanges.

The anchor investors include the likes of BNP Paribas Arbitrage, Societe Generale, SBI Life Insurance Company, HDFC Life Insurance Company, Sundaram Mutual Fund (MF), Aditya Birla Sun Life MF and HDFC MF among others.

Meanwhile, this is what brokerage house had said, as per the report in Moneycontrol.

Ravi Singhal, Vice-Chairman, GCL Securities

The analyst saidthe company has been posting losses for the last two years and its revenue has shrunk significantly from its 2019 levels, he said. The losses may extend further this year because of the Omicron crisis.

Clearly, investors cannot apply for this IPO for listing gains, though one may apply for the long term, based on their risk appetite.

Ravi Singh, Vice-President and Head of Research at ShareIndia

The investment firm saidthe infrastructure, realty, construction and mining are major sectors that are performing well and are going to play an important role in the next market rally.

The demand for residential real estate is gathering momentum across the country, and South India, where the company has a major presence, has been a major contributor to this revival.

However, at the current juncture, when the whole market is under the uncertainty of the new covid variant, Omicron, we advise investors to book their positions on the day of listing and wait for overall sentiments to turn around.

Marwadi Financial Services

The brokerage firm recommends investors avoid this IPO because it finds the company’s valuations expensive compared to its peers.

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