Despite sharp volatility in the secondary market amid global rout, the primary market remained attractive, reflected in the responses to initial public offerings (IPOs) of electric vehicle (EV) player Ola Electric and infrastructure construction firm Ceigall India. While the IPO of Ola Electric was fully subscribed on the second day, the issue of Ceigall India closed with 13.75 times bidding.
The ₹6,146 crore IPO of Ola Electric, which is touted to be the biggest since the LIC of India's ₹21,000 crore issue in May 2022, was subscribed 1.12 times on Day 2, after 0.38 times bidding on Day 1, as it received bids of 49,43,85,840 shares against the offered 46,51,59,451 equity shares, according to the data available on the stock exchanges. The issue started for subscription on August 2, and will close on August 6, 2024. The tentative listing date for shares of Ola Electric on the BSE and NSE is August 9.
The highly-anticipated IPO of Ola received a lower-than-expected response from investors, which is indicated by the falling grey market premium (GMP) price. The shares of Ola Electric were currently commanding GMP of ₹4 apiece over the issue price, falling sharply from ₹16.50 on July 30.
As per the exchange data, the retail portion was subscribed 2.87 times, while the quota reserved for non-institutional investors (NIIs) was booked 1.11 times. The portion set aside for qualified institutional buyers (QIBs) received 0.40 times bids, while the employee quota was the most subscribed by 8.98 times.
As per the RHP filed with the capital market regulator SEBI, the Bhavish Aggarwal-led EV company has reserved 75% of the issue for qualified institutional buyers, 15% for non-institutional bidders, and the remaining 10% for retail investors.
The IPO of Bengaluru-based EV company comprises a fresh issue of ₹5,500 crore and an offer for sale (OFS) of up to 8.49 crore shares by promoters and existing shareholders. At the upper end of the IPO price band of ₹72-76 per share, the company looks to garner ₹645.96 crore via OFS, taking the total issue size to ₹6,145.96 crore.
The capital raised from the fresh issue of equity shares will be used for capital expenditure to be incurred by the subsidiary, OCT for the Ola Gigafactory project and repayment of indebtedness incurred by subsidiary, OET. A part of the capital will be used for investment into research and product development, funding organic growth initiatives, and general corporate purposes.
Ceigall India IPO subscribed 13.75 times
The three-day IPO of infrastructure construction firm Ceigall India closed today, with the issue subscribing 13.75 times on the final day of bidding. The ₹1,253-crore issue of Ceigall received bids of 30,67,00,770 shares against the offered 2,23,13,663 equity shares, at a price band of ₹380-401, according to the data available on the stock exchanges. The tentative date for listing of shares of Ceigall India on the BSE and NSE is August 8.
The exchange data shows that the QIB portion was subscribed 31.50 times, while the portion set aside for NIIs and retail investors was booked 14.39 times and 3.71 times, respectively. The employee portion was subscribed 11.16 times.
The Ludhiana-based construction company has reserved half of the issue for qualified institutional buyers, 15% for non-institutional bidders, and remaining 35% for retail investors, as per the DRHP document.
The issue of Ceigall India is a mix of fresh issuance of equity shares worth ₹684.3 crore and an offer for sale (OFS) of equity shares worth ₹568.41 crore by existing shareholders including promoters. Out of the proposed ₹684.3 crore fundraising from fresh equities, the company intends to use ₹99.79 crore for the purchase of equipment; ₹413.4 crore for repayment of loans availed by the company and its subsidiary, CIPPL. The remaining fund will be used to meet general corporate purposes.
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