NSR-backed VRL Logistics ends day 1 with 43% rise in share price

Goods and passenger transport services provider VRL Logistics Ltd made a strong debut on the stock exchanges listing at Rs 288 a share, a 40 per cent premium to the issue price of Rs 205 per share.

In the early morning trades, the shares of the company touched an intra-day high of Rs 309.1 before closing at Rs 293.3 a share on the BSE in weak Mumbai market on Thursday.

In its recently concluded initial public offer (IPO), VRL Logistics received robust investors' response with bids worth 74 times or recording around 73x oversubscription for its Rs 492 crore (approximately $80 million) issue. This was the biggest oversubscription number in seven years for a primary market issue beating Reliance Power's IPO in February 2008.

Earlier, VRL Logistics had raised about Rs 140 crore (nearly $22 million) ahead of the IPO from a bunch of domestic and foreign investors which came as anchor investors.

It was the fourth company to hit the capital market with an IPO this year, and the first this year which saw the bumper participation from the investors.

Other companies that saw through a heavily oversubscribed public float in the recent past include Snowman Logistics Ltd, a cold chain unit of Gateway Distriparks Ltd, and Mumbai-based agrochemical firm Sharda Cropchem Ltd.

While Snowman floated its IPO in August last year, Sharda Cropchem came up with the issue in September. The public issue of both the companies saw subscription of around 60 times than the shares on offer.

VRL had previously filed its DRHP in December 2010 but did not go ahead with the IPO.

In the IPO, private equity backer New Silk Route (NSR) part-exited its around three years-old investment in the goods and passenger transport services provider making a return of around 2.47x. The PE firm's remaining stake is worth Rs 137 crore. It is sitting on unrealised gains of around 3.5x, as per VCCircle estimates.

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