Mumbai-based vertically integrated textile and garment manufacturing company Mandhana Industries Pvt Ltd made its debut with modest gain of 2% on listing day. The stock opened at Rs 132.7 translating into an unrealised listing gain of 15.3% for pre-IPO investor Axis Bank.
Axis Bank had struck the pre-IPO deal at Rs 115/share last year through a preferential allotment worth Rs 25 crore. Mandhana raised around Rs 108 crore by diluting 25% stake last month. It plans to utilise the proceeds in setting up a new garment manufacturing facility, and also for the expansion of its yarn dyeing and weaving facility in Maharashtra.
Incidentally, another financial investor in the company investment fund Structured Investments Limited (SIL) had exited its two-year-old investment in Mandhana through sale to the promoters ahead of the IPO.
SIL had invested Rs 7.4 crore in Mandhana in February 2008 at a price of Rs 298/share which worked out to Rs 149 post bonus issue last year. In addition, it acquired some more shares from one of the minority shareholders of Mandhana at the same price.
Pursuant to this, SIL had the right to sell back the shares to the promoters if the IPO did not materialise by March’09. This buyback was to be completed by March’10. The price at which promoters bought out SIL is not clear. Nishith Desai Associates had acted as SIL’s legal counsel for that transaction.
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