IPO gets bids for 3.17 crore shares
Prabhat Dairy's initial public offering (IPO) managed to sail through on Friday, 4 September 2015, on the back of good response for the issue from non institutional investors' category. As per the final subscription data on NSE, the IPO was subscribed 0.77 times or 77%. Bids were received for a total of 3.17 crore shares. Media reports suggested that the fresh issue of shares was subscribed more than one time, thus meeting the capital market regulator's minimum subscription provisions. Prabhat Dairy's IPO comprised of fresh issue of equity shares aggregating up to Rs 300 crore and an offer for sale of 1.47 crore shares from existing shareholders. According to the Issue of Capital and Disclosure Requirement (ICDR), a company is required to achieve minimum subscription clause of 90% of the fresh offer size.
The qualified institutional buyers (QIBs) portion of the IPO was undersubscribed and the retail investors' portion received a poor response. There was not a single bid from foreign institutional investors (FIIs) for the IPO. The non institutional investors' category, comprising of high networth individuals and corporates, was oversubscribed.
It may be recalled that due to poor response from investors, Prabhat Dairy on 1 September 2015 extended the bidding period for its initial public offer (IPO) by three days until Friday, 4 September 2015, with the company also lowering the price band for the IPO. The price band for the IPO was revised downwards to Rs 115-126 per share from Rs 140-147 per share. There was a discount of Rs 5 per share for retail investors.
Promoted by Sarangdhar Ramchandra Nirmal, Vivek Sarangdhar Nirmal and Nirmal Family Trust, Prabhat Dairy is an integrated milk and dairy products company in India, catering to institutional as well as retail customers. The company produces and sells a range of pasteurized milk and other dairy products to retail customers under the Prabhat, Flava and Milk Magic brands.
The company intends to utilise the IPO proceeds to partly pre-pay loans availed by company and its wholly owned subsidiary, Sunfresh Agro Industries (SAIPL), amounting to Rs 185 crore. The company also intends to utilise the IPO proceeds to meet capital expenditure of Rs 35.06 crore by wholly owned subsidiary SAIPL.
On consolidated basis, Prabhat Dairy's net profit rose 1.29% to Rs 21.05 crore on 16.81% growth in net sales to Rs 1000.77 crore in the year ended 31 March 2015 (FY 2015) over the year ended 31 March 2014 (FY 2014).
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