Shares of Prince Pipes and Fittings made a tepid debut on bourses on Monday, listing at Rs 160 per share on BSE and NSE, down 10 percent from its issue price of Rs 178.
The stock fell as much as 14.2 percent from its issue price to Rs 152.60 per share on BSE. The stock settled 6.4 percent lower at Rs 166.6 as compared to 0.04 percent or 17 points fall in BSE Sensex at 41,558.
The Rs 500-crore IPO did not receive a strong subscription and was subscribed only 2.21 times from December 18 to December 20, which was far lower compared to recent IPOs. The company, which had a price range of Rs 177 to Rs 178 per share, comprised of a fresh issue of shares worth Rs 250 crore and an offer for sale of the same amount.
The company's promoter group planned to dilute around 29 percent in the proposed IPO, which stands at 90.06 percent in the pre-issue period. Link Intime India Private Ltd is the registrar for the IPO, while JM Financial Limited and Edelweiss Financial Services Ltd are the book running lead managers to the issue.
Most brokerages believed that investors can subscribe to the IPO for listing gains, citing strong earnings growth and brand reputation. Strong brand reputation, a diversified product portfolio, strategically located manufacturing facilities and consistent earnings growth are among the positive strengths brokerages pointed out supporting Prince Pipes and Fittings.
Meanwhile, pledged shares by promoters, outstanding litigations, credit, and non-payment risk of distributors and closely tied demand for products are among the key risks cited by the brokerages
The company will use the proceeds from the IPO to pare certain outstanding loans, to finance the project cost towards the establishment of a new manufacturing facility and upgrade existing equipment at the manufacturing facilities.
The company has a diverse product portfolio, coupled with multi-location manufacturing units as well as a network of distributors pan-India. The polymer fittings company markets its products under Prince Piping Systems and Trubore.
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First Published: IST