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Shyam Metalics IPO subscribed 1.23 times on day 1; retail portion booked 2.18 times

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The initial public offering (IPO) of Shyam Metalics and Energy has been subscribed 75 percent so far on June 14, the first day of the bidding process.

Shyam Metalics IPO subscribed 1.23 times on day 1; retail portion booked 2.18 times
The initial public offering (IPO) of Shyam Metalics and Energy has been subscribed 1.23 percent so far on June 14, the first day of the bidding process. The offer has received bids for 2.59 crore equity shares against the IPO size of over 2.1 crore equity shares, as per the subscription data available on the exchanges.
The reserved portion of retail investors has been subscribed 2,18 times, while employees and non-institutional investors have put in 27 percent and 70 percent bids, against their reserved portion. Qualified institutional buyers have just started putting in bids.
The IPO size excluded the anchor portion as the company had already raised Rs 2,498 crore from anchor investors on Friday.
The Rs 909 crore public issue comprises a fresh issue of up to Rs 657 crore and an offer for sale (OFS) of Rs 252 crore by existing shareholders. The three-day offer will close on June 16.
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The OFS consists of a sale of up to Rs 37 crore worth of shares by Subham Capital, Rs 63 crore by Subham Buildwell, Rs 30 crore by Dorite Tracon, Rs 97 crore by Narantak Dealcomm, and Rs 25 crore by Kalpataru Housefin & Trading.
The company has been able to offer continuous and good financial and operational performance owing to increased productivity and cost reduction. Analysts have advised subscribing to the issue based on the company’s strong financial and operational performance.
“At a higher price band of Rs 306, SMEL is demanding a TTM EV/EBITDA multiple of 8.6x, which is at a premium to the peer average of 6.4x. Despite factoring in an exponential rise in EBITDA in Q4 FY21, the company still appears to be overvalued compared to its peers,” said Choice Broking.
With favourable macros for steel consumption, a cautious view of the international steel prices, and a higher demanded valuation, the brokerage assigned a “Subscribe with Caution” rating for the issue.

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