Nahar Group-promoted Monte Carlo Fashions Ltd's shares were listed at Rs 584 on the stock exchanges on Friday, nearly 9.5 per cent lower from the issue price of Rs 645, according to information available on the exchanges.
In the morning trade, shares of the apparel manufacturer tanked to Rs 530, before making some recovery on the National Stock Exchange, a decline of 18 per cent from the issue price. This also made it the weakest performer among four other firms that went public this year.
Monte Carlo IPO was the fifth public issue to clear the ropes this year after Wonderla, Snowman Logistics, Sharda Cropchem and Shemaroo Entertainment, and the first company whose shares have dropped below the IPO price despite good response to the offer.
On their respective debut days, Snowman Logistics' shares surged around 80 per cent; Sharda Cropchem (50 per cent); Wonderla Holidays (nearly 32 per cent) and Shemaroo Entertainment around 6 per cent.
The initial share sale of Monte Carlo was subscribed 7.83 times, as the public offer received over 29.7 million bids against more than 3.8 million equity shares on offer. The price band of the issue was fixed at Rs 630-645. Due to over-subscription, the issue was priced at the upper end.
Monte Carlo's IPO to raise Rs 350 crore comprised entirely of an offer for sale by promoters and existing investor Samara Capital. Post IPO, the promoters' shareholding is at 63.63 per cent.
Aditya Birla Private Equity had picked 2.5 per cent stake in Monte Carlo Fashions Ltd for Rs 35 crore ($5.6 million) as part of an anchor investor allotment ahead of the public issue.
Others who participated as anchor investors include mutual fund schemes under Tata Capital and Birla Sun Life besides an entity under Deutsche Bank. Put together, the anchor investors committed Rs 105 crore at Rs 645 a share, the upper end of the issue price band.
As on March 31, 2014 there were 191 ‘Monte Carlo Exclusive Brand Outlets’ in India, two such stores in Dubai and one in Kathmandu, Nepal. Of the 191 exclusive stores in India, 17 are owned and operated by the company itself and the rest are run through franchisees.
In fiscal 2013-14, Monte Carlo posted a net profit of Rs 55.38 crore on revenues of Rs 518.89 crore.
The company increased its total revenue from fiscal 2012 to fiscal 2014 at a compound annual growth rate of 17.57 per cent and its net profit grew at a compound annual growth rate of 6.47 per cent over the same period.
Shares of the company ended the day at Rs 566.25, down 3.04 per cent on NSE.
(Edited by Joby Puthuparampil Johnson)