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Fine Organics IPO makes slow start; RITES issue covered 60% on first day
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The initial public offering of speciality chemicals maker Fine Organics Industries Ltd made a slow start on Wednesday but the maiden share sale of state-run railways consultant RITES Ltd covered more than half the distance.

Fine Organics received bids for 0.6 million shares at the end of the first day. That’s 12% of the total 5.36 million shares on offer, stock-exchange data show.

The portion reserved for institutional buyers was subscribed 17% while that for retail investors was covered 12%. Non-institutional investors remained largely on the sidelines.

Ahead of the IPO, the company raised Rs 180 crore by selling 2.3 million shares to anchor investors including Goldman Sachs, Kuwait Investment Authority and a bunch of mutual funds.

Fine Organics is seeking a valuation of as much as Rs 2,400 crore ($355 million). It has fixed the price band at Rs 780-783 a share. The issue closes on Friday.

The IPO seeks to raise as much as Rs 600 crore. The issue is entirely a secondary market sale by the promoters and other shareholders. It consists of 7.66 million shares, representing 25% of the post-issue equity capital.

Fine Organics, which makes ingredients for the petrochemicals and food industry, had filed its IPO proposal on 8 February. It received approval from the Securities and Exchange Board of India (SEBI) last month.

The firm is following in the footsteps of about four dozen listed peers, including Blackstone-backed SH Kelkar & Co. Ltd, BASF India and Shree Pushkar Chemicals & Fertilisers.

JM Financial and Edelweiss Financial Services are managing the IPO.

RITES IPO

The state-owned company received bids for 15 million shares, or 60% of the total 25 million on offer, at the end of the first day, stock-exchange data showed.

Retail investors’ portion was covered 1.6 times while non-institutional investors bid for 19% of the shares set aside for them. The institutional buyers’ quota was covered only 2%.

RITES is seeking Rs 3,700 crore ($550 million) valuation via the IPO, which closes on Friday.

RITES, which is wholly owned by the government, has set a price band of Rs 180-185 apiece, resulting in an IPO size of Rs 466.20 crore at the upper end of the range.

The public issue will result in 12.6% stake dilution by the government, which will get three years from the date of listing to bring its stake to 75% or below.

The share sale of RITES is part of the government’s disinvestment target for the current financial year.

Elara Capital, IDBI Capital Markets, IDFC Bank and SBI Capital Markets are managing the IPO.

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