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Transportation company VRL Logistics listed at a premium of about 40 per cent on Thursday, following record demand for its Rs 460-crore initial public offering (IPO). The company stock closed at Rs 292.5, up 43 per cent compared its issue price of Rs 205.
Earlier this month, the company’s IPO was subscribed 74 times, as investors bet on the e-commerce boom in the country which, they felt, would benefit delivery companies such as VRL. In terms of subscription, the demand was the highest for an Indian IPO in about eight years.
In terms of listing day performance, VRL has recorded the best IPO this year. Renewable energy firm Inox Wind, listed earlier this month, had seen its shares soar 35 per cent on debut.
On Thursday, shares of VRL traded between Rs 286 and Rs 309 apiece on the National Stock Exchange.
Analysts said follow-up demand contributed to the listing day premium, as only a few investors managed to garner subscription in the IPO. Though the IPO had attracted more than 500,000 applications, only a fraction of these were allotted, owing to the limited shares on offer.
ICICI Securities and HSBC Securities and Capital Markets (India) were the investment bankers handling the VRL IPO.
It is expected India’s logistics sector will grow about 15 per cent annually through the next three years due to an economic recovery, lack of capacity in the railways and improved road infrastructure.
Experts say strong gains by companies such as VRL and Inox Wind will help attract more investors towards IPOs and boost the prospects of companies waiting to hit the market. About a dozen companies have filed IPO documents with the Securities and Exchange Board of India.
