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Hedge fund-backed Antony Waste Handling scraps IPO on coronavirus scare
Photo Credit: VCCircle

Antony Waste Handling Cell Ltd, the first waste management services company in India to float an initial public offering, withdrew the public issue on Monday as it failed to secure enough subscription.

Previously, the firm on March 6 extended the bid duration by five business days to March 16.

The public offering of 4.82 million shares – excluding the anchor allotment – was covered 50% after receiving bids for nearly 2.41 million shares at the end of 6 March, stock-exchange data showed. The IPO saw no new bids since then.

Instead, some existing bids were cancelled and the book remained subscribed at 49% based on demand for 2.38 million shares at the end of Monday, data showed.

The timing of Antony Waste’s IPO overlapped with that of the Rs 10,350-crore share sale of SBI Cards & Payment Services Ltd, which saw a stellar investor turnout but a weak debut on Monday as India and global stock markets continued their free fall.

Concerns over a slowdown in economic growth on the back of the coronavirus outbreak, the crude oil price war between Saudi Arabia and Russia and the Yes Bank saga have all rattled the investor confidence in the past two weeks.

Central Bank in 43 economies have cut interest rates so far as an emergency measure to coronavirus outbreak. US Federal Reserve on Sunday cuts its interest rates to almost zero to support the economy.

Following the Fed, the Bank of Japan (BoJ) announced it would double the purchasing limit of exchange-traded funds (ETF) to 12 trillion Japanese Yen ($112 billion), and was even prepared to cut interest rates further into negative territory from the current -0.1%.

The Reserve Bank of India is scheduled to meet later on Monday to brief on the situation on India’s banking and financial markets.

Antony Waste, which counts US billionaire Paul Singer’s hedge fund Elliott Management Corp as its backer, raised Rs 60.94 crore ($8.32 million) from anchor investors by allotting shares at the lower end of the Rs 295-300 price band. It is seeking a valuation of Rs 802.66 crore ($111 million) via the IPO.

The company had already trimmed its offering size compared with its earlier proposal when it filed its draft prospectus. The IPO now comprises a fresh issue of shares worth Rs 35 crore against an earlier plan to raise Rs 43.5 crore. Besides, its existing Mauritius-based shareholders will now sell 5.7 million shares against 9.44 million shares proposed earlier.

At the upper end of the price band, the IPO size is pegged at Rs 206 crore against the earlier estimates of Rs 300 crore.

Leeds (Mauritius) Ltd, Tonbridge (Mauritius) Ltd, Cambridge (Mauritius) Ltd and Guildford (Mauritius) Ltd are selling shares in the IPO. These firms are backed by New York-based Elliott Management, which manages about $40 billion in assets.

Elliott is the world’s largest activist fund in terms of assets under management. Activist hedge funds are typically geared towards unlocking shareholder value.

According to Elliott’s website, the firm employs a multi-strategy trading approach and focuses on investing in distressed securities, equity-oriented deals, hedge/arbitrage, and commodities trading. It also looks at debt, private equity, private credit, and real estate-related securities.

Equirus Capital was the sole merchant banker mandated to manage and arrange the share sale.

Incorporated in January 2001, Antony Waste offers solid waste collection, transportation, and processing and disposal services. Since its inception, the company has undertaken more than 25 projects, of which 14 are ongoing.

Municipal corporations in cities and districts such as Mumbai, Navi Mumbai, Thane, Ulhasnagar, North Delhi, Greater Noida, and Mangalore are some of the company’s key public clients.

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