Retail investors miss rally in Midhani;stock zooms 74% against offer price

The stock hit a new high of Rs 151 in intra-day trade on Wednesday, rallied 73% against its offer price of Rs 87 per share to retail investors.

Retail investors have missed the rally in Mishra Dhatu Nigam (Midhani) as the stock of state-owned company hit a new high of Rs 151 in intra-day trade on Wednesday, rallying 73% against its offer price of Rs 87 per share.

The stock was trading higher for the seventh straight trading sessions, zoomed 62% in past four trading days.

Midhani had made a tepid debut by listing at Rs 87 on April 4, 2018, a 3% lower against issue price of Rs 90 offered to qualified institutional buyers (QIB) and non-institutional investors (NII). The company offered a discount of Rs 3 on the issue price to retail individual bidders and to eligible employees bidding in the employee reservation portion.

The issue was managed to subscribed 1.23 times mainly on due to support from state-run insurance companies mainly Life Insurance Corporation of India (LIC). The quota for qualified institutional buyers (QIBs) was subscribed 1.96 times. The NIIs portion was subscribed by just 12% (0.12 times) and retail investors by 72% (0.72 times).

According to shareholding pattern filed by Midhani on Monday after market hours reveals that, individual shareholders held 5.09% stake in the company as of March 2018.

Insurance companies led by LIC (8.73%), General Insurance Corporation of India (1.55%), The New India Assurance Company (1.29%) and others (1.65%) have collectively held 13.22% stake in the company as of March 2018.

The two mutual funds HDFC Trustee Company – HDFC Prudence Fund (2.92%) and ITPL – Invesco India PSU Equity Fund (2.48%) have combined held 5.4% stake, data shows. The government of India held 74% stake in Midhani.

Midhani, a Mini Ratna, Category-I status company - is one of the leading manufacturers of special steels, super alloys and only manufacturer of titanium alloys in India. These are high value products which cater to niche end user segments such as defence, space and power.

According to PTI report, the Defence Ministry last month had come out with a draft policy which envisages achieving a turnover of Rs 1.7 trillion in military goods and services by 2025 by promoting the domestic defence industry. The policy says the aim is to make India one of the top five manufacturers of defence platforms with active participation of public and private sectors.