Theme parks operator Adlabs Entertainment Ltd continues to struggle to attract investors to its initial public offer (IPO) despite cutting the price band and extending the issue period. At the end of day 5, the issue has not even reached the two thirds mark.
The issue, which is to now close on Tuesday, March 17, has seen investors bid for just 60.4 per cent odd shares offered to the public, exchange data shows.
Manmohan Shetty-promoted Adlabs has seen full subscription from only retail investors. The institutional investors’ portion is covered only 54 per cent and HNIs and corporates applied for shares worth around 56 per cent reserved for them.
At the end of day 4, the first day of the extended issue, the subscription nudged up just marginally from 44 per cent to 47 per cent.
Earlier, the firm cut the price band of the IPO and extended the time period of the issue, which was to close last Thursday, by another three trading days hoping to attract investors. This was after it failed to see through its issue as originally planned.
The price band has been revised to Rs 180-215 a share from Rs 221-230 a share.
The firm had offered 17.6 million shares to the public after the anchor allotment portion where it raised Rs 60 crore (just under $10 million) from a hedge fund under Edelweiss, besides a string of mutual funds under Axis, L&T Fin, HDFC AMC and a fund under Daiwa. The anchor investors had picked the shares at the lower end of the Rs 221-230 a share price band of the IPO.
The overall issue, including the anchor allotment portion, comprises 20.03 million shares of which around a tenth is through an offer for sale by the promoters.
At the new price band, the firm would be able to raise a maximum of Rs 436 crore including anchor investors commitment as against up to Rs 464 crore with the previous pricing.
The IPO had got off to a slow start with subscription of just 3 per cent on the first day which only managed to reach 18 per cent at the end of day 2 and thereafter to 44 per cent as of day 3.
Adlabs is backed by ICICI Venture, which invested in the company in mid-2013 and Jacob Ballas, which came in as a pre-IPO investor a few months ago. ICICI Venture holds 16.95 per cent stake while NYLIM-JB owns 4.13 per cent and Jacob Ballas separately owns 0.22 per cent.
With the new IPO price band, ICICI Venture is now sitting on a potential upside of 30-56 per cent while Jacob Ballas is sitting on 15 per cent paper gains at the upper end of the price band. If the issue price is fixed at the lower end, its investment would be underwater.
Adlabs’ issue is being managed by Deutsche Equities, Centrum Capital and Kotak Mahindra Capital.