After a bunch of tepid listing of private equity-backed firms last week, two new companies entering the stock exchange on Tuesday have painted a mixed picture. While one firm is trading below issue price despite being backed by a number of institutional investors who apparently picked a large chunk of the company’s total shares during the IPO, the other PE-backed firm is flying on the bourses.
These two come after last weeks listings of companies like Career Point Infosystems, Ramky Infrastructure, Orient Green Power, Electrosteel Steel and Eros.
The company, having a string of pre-IPO backers including Avigo Capital besides Credit Suisse, Kotak Mahindra Capital and Macquarie Asia Pacific Co- Investment Fund LP, opened with 12.3% gain and in early hours is trading at 20% premium to its issue price of Rs 355.
At this price, the company, that is into installation of conveyor systems and manufactures equipments like crushers, screens, feeders, conveyor components like idlers and pulleys besides structural steel fabrication, is valued at Rs 2,147 crore ($480 million).
One of the early financial investors in the company, Metmin Investments part exited its five-year-old investment in Tecpro Systems Limited with 7x returns. Metmin’s average cost of acquisition is pegged at Rs 51.25 per share and at latest price is sitting on 8.3x returns.
Credit Suisse and Kotak Mahindra invested at Rs 240 per share and are sitting on unrealised gains of around 77% in their three-year-old investment. Last year Macquarie Asia Pacific Co- Investment Fund LP also acquired shares from the promoters at Rs 240 a piece.
This was the second attempt to go public for Tecpro that had earlier filed its draft three years ago to raise around Rs 100 crore. This time the issue size was more than doubled with one of the financial investors looking to cash out partly with meaty profit. Tecpro plans to use a large chunk of the money raised to fund working capital requirements.
The apparel firm that sells under the brands Cantabil and La Fanso, listed marginally down and, in early morning trade, was 10% below issue price. At the last traded price of around Rs 120 has a market cap of Rs 195 crore.
Cantabil started its garments manufacturing and retailing business in 2000 and opening its first Cantabil store on September, 2000 in New Delhi. It has a range of formalwear, party-wear, casuals & ultracasual clothing for Men, Women and Kids in the middle to high income group. The company has around 411 retail outlets (around a third operated by the company) and plans to expand it by opening another 180 exclusive outlets by March 2011.
The firm raised Rs 105 crore for establishing an integrated manufacturing facility at Bahadurgarh (Haryana), expansion of retail network besides working capital and debt repayment. The firm has three in-house manufacturing facilities (with capacity for 13 lakh garments per annum) and four warehouses and fabricating arrangements.