Electrical goods manufacturer Polycab India Ltd made a strong debut on the stock markets on Tuesday with its shares listing at a premium of 17.7% to its initial public offering price and inching higher thereafter.
Shares of Polycab began trading on the Bombay Stock Exchange at Rs 633 apiece, compared with the issue price of Rs 538. The stock rose to a high of Rs 667.55 intraday before closing the first day of trading at Rs 655 apiece.
Polycab's shares command a market capitalisation of Rs 9,736.31 crore — the second largest electric equipment company by market value. Havells India is the largest company by market value with Rs 47,379 crore in market capitalisation.
The BSE's 30-stock benchmark Sensex jumped nearly 1% on Tuesday.
Polycab is the sixth company to list on the main board of the stock exchanges in 2019. One company -- Metropolis Healthcare Ltd -- had made a strong debut while two companies tanked on their listing days and two others ended flat after losing initial gains.
Polycab's robust debut comes after it received a thumping response to its share sale. The IPO was subscribed 51.83 times as it received bids for 914.3 million shares for the 17.63 million shares on offer.
Institutional buyers' quota of shares was covered 92.44 times while the portion reserved for non-institutional investors such as corporate houses and affluent individuals was subscribed 110 times.
This was the best investor turnout across categories in an IPO in nine months. HDFC Asset Management Co Ltd's IPO last July saw huge investor turnout with the issue being subscribed a little over 83 times.
Polycab had attracted a number of marquee anchor investors including private equity firms ChrysCapital and sovereign wealth fund Kuwait Investment Authority ahead of the IPO. In all, Polycab raised Rs 401.03 crore from 25 anchor investors.
Polycab is backed by International Finance Corporation (IFC), the World Bank’s private-sector investment arm. The IPO involved an issue of fresh shares as well as a share sale by IFC and the company's promoters. The total IPO size was Rs 1,345 crore ($195 million), far lower compared with the estimated Rs 2,500 crore when the company filed for IPO.
It was seeking a market capitalisation of Rs 8,942 crore ($1.3 billion) through the public offering, after trimming its size.
Kotak Mahindra Capital Co, Axis Capital, Citigroup Global Markets India, Edelweiss Financial Services, IIFL Holdings and Yes Securities (India) managed the IPO.
Incorporated in January 1996, the company makes electrical wires, cables and fast-moving electrical goods. It joins listed peers such as Finolex Cables, KEI Industries, Diamond Power Infrastructure and Cords Cable Industries on the stock exchanges.