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HG Infra Engineering makes weak stock market debut

Infrastructure developer HG Infra Engineering Ltd made a weak start on the stock exchanges on Friday with its shares listing at the initial public offering price and falling thereafter.

Shares of HG Infra began trading on the BSE at the issue price of Rs 270 apiece, stock-exchange data showed. The stock touched a low of Rs 252.60 in the opening trade.

The stock closed at Rs 270.05 apiece. The company now commands a market capitalisation of Rs 1,759.95 crore as compared with Rs 1,759.62 crore valuation it sought through the IPO.

The benchmark BSE Sensex lost its intraday gains to close Friday’s session down 0.13%.

HG Infra is the sixth company to list on the main board of the bourse in 2018. Four of the previous five had gained on debut.

The company’s IPO was covered nearly five times the shares on offer, thanks to last-minute bids from wealthy investors.

The total issue size was Rs 462 crore. HG Infra issued fresh shares worth Rs 300 crore while its promoters sold 6 million shares worth Rs 162 crore.

HG Infra had filed its draft proposal with SEBI on 28 September last year. It received regulatory nod to float an IPO on 13 December.

SBI Capital Markets and HDFC Bank were the merchant bankers that managed the IPO. Choice Capital was the adviser on the IPO.

HG Infra joins listed peers such as Capacit’e Infraprojects Ltd, Bharat Road Networks Ltd, Shankara Building Projects Ltd, PSP Projects Ltd, Dilip Buildcon, Sadbhav Infrastructure Project Ltd, PNC Infratech Ltd and MEP Infrastructure Developers Ltd. All these companies went public in the last three years.

Other companies in the segment that are looking to float IPOs include GR Infraprojects Ltd and GVR Infra Projects Ltd.

HG Infra was incorporated in January 2003. It builds highways, bridges and flyovers. It has also executed water pipeline projects. The company has completed 12 projects during the last five years. It had 29 ongoing road projects with an order book of Rs 3,811.49 crore as on July 2017.

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