Hit by a poor response to its aggressively priced initial public offer, speciality chemicals manufacturer Galaxy Surfactants has withdrawn the IPO from the market, a day before it was supposed to close today.
The issue, which opened for subscription on May 13, witnessed a tepid response, with the overall offer being subscribed just 0.30 times. The offer had received bids for 14.8 lakh shares till yesterday, as against 50.4 lakh equities on offer, as per data available on the NSE till 1700 hours.
The Qualified Institutional Buyers (QIB) portion was subscribed 0.59 times, while the non-institutional investors portion was subscribed a mere 0.04 times and the retail investors segment 0.11 times, the data revealed.
"Whenever an IPO is withdrawn, the first reason that comes to our mind is the poor response toward the offer. Lukewarm response has plagued the company's book-building process. Also, the overall market condition has been sluggish, which also dampened its prospects," SMC Capitals Strategist and Head of Research Jagannadham Thunuguntla said.
He further said this is the first public offer to be withdrawn this fiscal.
Analysts said the issue was also hit because of the aggressive pricing.
The company had entered the capital market with its IPO of 59.3 lakh equity shares with a price band of Rs 325-340 a share.
It intended to utilise the issue proceeds partly towards funding the capital expenditure of its step-down subsidiary, Galaxy Chemicals (Egypt) SAE, through investment in its subsidiary, Galaxy Holdings Mauritius Limited (GHML).
Motilal Oswal Investment Advisors Private and Centrum Capital were the book running lead managers to the issue.
