 "HPL Electric debuts at 6% discount to issue price")
Shares of HPL Electric & Power listed at Rs 190 on the National Stock Exchange (NSE) – a six per cent discount over its issue price of Rs 202 per share. The stock hit an intraday high of Rs 198 before slipping to close at Rs 189, down 6.4 per cent. This is the second consecutive firm to list at a discount to its issue price.
Last week, ICICI Prudential Life Insurance had listed one per cent below its issue price. The Rs 361-crore initial public offering (IPO) of electrical equipment manufacturer HPL Electric & Power was oversubscribed eight times.
The institutional investor portion of the IPO was subscribed 5.7 times, the high net worth individual category was subscribed 22 times, while retail investor segment was subscribed 3.3 times, according to data put out on the NSE website. HPL Electric manufactures electrical equipment such as metering solutions, switchgears and wires under the HPL brand. Over FY12-16, it reported a compounded annual growth rate of 11.7 per cent and 6.5 per cent on revenue and profitability, respectively. Also, overall debt has increased from Rs 306 crore in FY12 to Rs 548 crore in FY16.
HPL Electric & Power is the 19th company to list this year on the bourses. Of these 19 companies, 11 have given double-digit returns on listing day, while six have ended in the red. Together, these companies have raised over Rs 19,000 crore.
Last week, ICICI Prudential Life Insurance had listed one per cent below its issue price. The Rs 361-crore initial public offering (IPO) of electrical equipment manufacturer HPL Electric & Power was oversubscribed eight times.
The institutional investor portion of the IPO was subscribed 5.7 times, the high net worth individual category was subscribed 22 times, while retail investor segment was subscribed 3.3 times, according to data put out on the NSE website. HPL Electric manufactures electrical equipment such as metering solutions, switchgears and wires under the HPL brand. Over FY12-16, it reported a compounded annual growth rate of 11.7 per cent and 6.5 per cent on revenue and profitability, respectively. Also, overall debt has increased from Rs 306 crore in FY12 to Rs 548 crore in FY16.
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The company is looking to reduce its debt by Rs 130 crore through the IPO proceeds, which will help it reduce its interest costs to some extent and improve profit margins in the coming years, according to a note by Religare Securities. At the upper price band of Rs 202, the stock is available at trailing P/E of 37.8x, which is at a premium compared to its peers.
HPL Electric & Power is the 19th company to list this year on the bourses. Of these 19 companies, 11 have given double-digit returns on listing day, while six have ended in the red. Together, these companies have raised over Rs 19,000 crore.