Everstone-backed S Chand’s IPO sails through on second day
Photo Credit: Mukul Mudgal/VCCircle

The initial public offering (IPO) of education-focused publishing house S Chand & Company Ltd was covered nearly two times on the second day of the issue on Thursday.

The public offering of nearly 7.69 million shares—excluding anchor investors’ portion—received bids for 15.04 million shares, stock-exchange data showed.

The IPO had crossed the halfway mark on the first day of the issue on Wednesday.

Institutional and retail investors led the bidding. The quota of shares reserved for institutional buyers was subscribed nearly 2.7 times while retail investors’ portion was covered a little more than two times.

The portion set aside for non-institutional investors—such as corporate houses and wealthy individuals—is yet to be fully subscribed.

On the grey market, S Chand’s shares were quoting at a premium of Rs 80-100 a share above its price band, two market dealers told VCCircle.

Ahead of the IPO, the company had raised Rs 219 crore (around $34 million) from anchor investors on Tuesday.

S Chand had increased the size of its initial share sale, as the Everstone Capital-backed company looked to benefit from a rise in stock markets this year. Benchmark indexes jumped to a record high on Wednesday.

The firm is raising Rs 325 crore by issuing new shares, according to the red herring prospectus it filed with the Securities and Exchange Board of India (SEBI). It had earlier targeted to mop up Rs 300 crore.

The IPO also includes an offer for sale of about 6 million shares by Everstone and other shareholders, including the promoters. The selling shareholders will mobilise up to Rs 403 crore.

At the upper end of the Rs 660-670 per share price band, the company will have a valuation of Rs 2,325 crore.

The IPO comes barely months after S Chand made one of the largest acquisitions in India’s education-related publishing segment. It picked up a majority stake at an enterprise value of Rs 220 crore in Kolkata-based Chhaya Prakashani Pvt. Ltd, which publishes books for schools students of up to 12th standard (K-12) as well as college and engineering students.

S Chand is one of close to a dozen companies that have received regulatory approval to float an IPO. In addition, around 10 firms have sought clearance from SEBI to go public.

The companies that have already floated their IPOs this year include stock-exchange operator BSE Ltd; Avenue Supermarts Ltd, which operates hypermarket chain D-Mart; FM radio firm Music Broadcast Ltd and Shankara Building Products Ltd.

S Chand, which is also backed by International Finance Corporation, had filed its draft red herring prospectus with SEBI on 19 December. It received SEBI’s clearance last month.

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