The initial public offering of Apex Frozen Foods Pvt. Ltd got oversubscribed 45% on the second day of the public issue on Wednesday.
Retail investors led the show with the portion earmarked for them being covered almost three times. HNIs and corporates bid for around 45% or just around half of their portion. So far, institutional investors have refrained from bidding for the shares of the firm.
The company is planning to raise Rs 152 crore from the IPO which opened on Tuesday. The total issue size is 62.1 lakh shares. The issue closes on Thursday.
The producer of aquaculture products on Monday raised Rs 43.57 crore (around $6.8 million) via a share sale to anchor investors ahead of its three-day IPO. Apex Foods raised the capital from three mutual fund firms–HSBC Mutual Fund, Reliance Mutual Fund and Invesco Mutual Fund–by selling 24.9 lakh shares at Rs 175 apiece, it said in a stock exchange filing. The shares were subscribed at upper end of the Rs 171-175 price band.
Anchor investors are institutional investors who accept a one-month lock-in period for a sizeable allocation of shares and support a public offering. Their participation highlights investors’ confidence in an IPO and sets a benchmark for the investor community at large.
Apex Frozen Foods is based out of Kakinada in Andhra Pradesh. It is a producer and exporter of aquaculture products. The company was originally formed as a partnership firm in October 1995 under the name Apex Exports. Apex Frozen Foods was incorporated in March 2012.
It is promoted by father-son duo Karuturi Satyanarayana Murthy and Karuturi Subrahmanya Chowdary. The promoter group holds 99.9% stake in the company.
The firm already has a shrimp processing facility with 9,240 MTPA (metric tonnes per annum) capacity. It plans to use the net proceeds from the IPO to set up another shrimp processing unit with a capacity of 20,000 tonnes per annum.
In financial year 2016-17, the company’s operating revenue stood at Rs 699 crore and profit after tax was Rs 24.92 crore.