State-run railway infrastructure engineering company Ircon International Ltd made a disappointing stock market debut on Friday as its shares slumped as much as 13.6%.
Shares of Ircon started trading at Rs 410 apiece on the BSE, compared with the initial public offering price of Rs 475, stock-exchange data showed.
The shares pared the losses in morning trade to touch a high of Rs 464.40 apiece, but fell again to close 12.3% down at Rs 416.65 each. The company is now valued at Rs 3,918.66 crore; it had sought a valuation of Rs 4,467 crore through the IPO.
The weak debut comes after the company's Rs 470-crore ($65 million) IPO was covered nearly 10 times.
The IPO comprised a sale of 9.9 million shares by the government, whose stake in the company has now fallen below 90%. The government will get three years to bring its stake down to 75% or lower, as per regulatory guidelines for listed firms.
Ircon had filed its draft red herring prospectus (DRHP) on 27 March this year. It received Securities and Exchange Board of India (SEBI) approval on 12 July.
IDBI Capital Markets & Securities, Axis Capital and SBI Capital Markets managed the IPO.
Ircon’s share sale was part of the government’s efforts to raise Rs 80,000 crore ($12.5 billion) from stake sales in state-run companies in the current fiscal year.
Ircon International, which was incorporated in April 1976, is an integrated engineering and construction company specialising in major infrastructure projects, including railways, highways, bridges among other residential, commercial and industrial infrastructure activities.
The company is headquartered in New Delhi and operates through 26 project offices and five regional offices in India, besides five overseas project offices in Sri Lanka, Bangladesh, Malaysia, South Africa and Algeria.