Amber Enterprises extends gains after strong stock market debut

Amber Enterprises India Ltd made a strong start on the stock exchanges on Tuesday with its shares listing at a 37% premium to the initial public offering price and extending gains thereafter.

Shares of Amber Enterprises began trading on the BSE at Rs 1,180 apiece, compared with the issue price of Rs 859, stock-exchange data showed.

The stock touched a low of Rs 1,114.10 in the first 10 minutes of trade but recouped losses to close at Rs 1,237.25, up 44% from the issue price. The benchmark BSE Sensex fell 0.7%.

Amber, which makes white goods for global players such as Whirlpool and Daikin, is the third company to list on the main board of stock exchanges in 2018. The previous two companies, Newgen Software Technologies Ltd and Apollo Micro Systems Ltd had also gained on their debuts.

Amber now commands a market capitalisation of Rs 3,890.72 crore, compared with Rs 2,701.25 crore it had sought in the IPO.

The strong listing follows an IPO that attracted a massive turnout from investors earlier this month. Amber’s book was subscribed 165 times.

Amber, which is backed by Asia-focussed private equity firm ADV Partners, raised Rs 600 crore through the IPO. It issued nearly 5.53 million fresh shares while promoters Jasbir and Dalgit Singh sold 1.45 million shares.

VCCircle had reported recently that ADV Partners was sitting on sizeable gains from its one-year-old bet in Amber Enterprises.

The company had earlier proposed to raise Rs 555 crore at the time of filing its draft prospectus with the Securities and Exchange Board of India (SEBI) in September. It received regulatory approval for the IPO on December 5 last year.

Amber will use Rs 345 crore of the net proceeds to repay loans. The balance amount from the Rs 450 crore of fresh proceeds will be used for general corporate purposes, after meeting offer-related expenses.

Edelweiss Financial Services, IDFC Bank, SBI Capital Markets and BNP Paribas managed the IPO.

Amber makes air conditioners, microwave ovens, components for refrigerators and other consumer durable products for clients such as Videocon, John Deere, Swaraj Mazda, Godrej, Whirpool, Blue Star, Philips and Voltas.

In addition, the group runs Amber Aviation, which operates aircraft charters and provides commercial pilot training. Amber’s promoters also entered the off-grid solar power generation sector in 2015 in partnership with Silicon Valley-based Twin Creeks Technologies.

Amber serves eight of the 10 top room air-conditioner brands in India and counts Daikin, Hitachi, LG, Panasonic, Voltas and Whirlpool as its key customers. It claims a market share of 55.4% in this category by volume for the year ended March 31, 2017.

The company was founded in 1994 with a single factory in Punjab. It now has 10 manufacturing units across seven locations, of which six are operational. The company was set up by Kartar Singh and is now managed by his sons Jasbir and Daljit.

Leave Your Comment(s)