PE-backed Capacit’e Infra IPO sees record demand; oversubscribed 182 times

By Ankit Doshi

  • 15 Sep 2017
PE-backed Capacit’e Infra IPO sees record demand; oversubscribed 182 times
Credit: Shah Junaid/VCCircle

Construction firm Capacit'e Infraprojects Ltd attracted record demand for its three-day initial public offering that closed on Friday, driven by strong investor participation across categories.

The offering of 11.42 million shares, excluding the anchor allotment, received bids for 2.08 billion shares, stock exchange data showed. The book was covered nearly 183 times.

The IPO was fully covered on its first day on Wednesday. It was covered 4.62 times on day two.


The retail portion, in which bids cannot exceed Rs 2 lakh, was covered nearly 16 times the 5.71 million shares reserved for them. The qualified institutional buyers’ category was covered 134 times the 3.26 million shares on offer.

The portion set aside for non-institutional investors, comprising corporate bodies and wealthy individuals, was covered 651 times, data showed.

Capacit'e beat the subscription seen in IPOs of CDSL and Avenue Supermarts, which runs hypermarket chain D-Mart, earlier this year. To be sure, CDSL’s IPO is the most successful offering in India since Gurgaon-based FCS Software’s Rs 17.5 crore IPO in August 2005.


Bengaluru-based business service provider Quess Corp’s share sale last year was covered 144.5 times and Avenue Supermarts’ IPO in March 2017 was subscribed 104 times.

The Mumbai-based company, which counts Paragon Partners and NewQuest Capital Partners as its private equity backers, on Tuesday raised Rs 120 crore by selling shares to a bunch of anchor investors at the upper end of the Rs 245-250 apiece price band, according to a stock-exchange filing.

Capacit'e Infra's IPO is the second such IPO this year to have been fully covered on its opening day. Avernue Supermarts’ public issue was fully covered on the first day.


D-Mart’s IPO was subscribed 105 times and yielded 265% returns following a blockbuster listing in March 2017.

Capacit’e Infra is looking to raise Rs 400 crore ($62.5 million) through the public issue which is entirely a fresh offering. Existing shareholders, including private equity investors, will not offload any of their holdings.

As Capacit’e Infra seeks a valuation of Rs 1,697.28 crore ($265 million) from the IPO, it will result in a 23.56% stake dilution on a post-issue basis at the upper end of the price band.


While Paragon’s stake will dilute to 11.98% from 15.68% after the IPO, NewQuest’s stake will reduce to 9.74% compared with the current 12.75% data shows. Promoter and promoter group holdings will drop to 43.78% from 57.29%.

Axis Capital, IIFL Holdings and Vivro Financial Services are the merchant bankers for the IPO.

The company had filed its draft red herring prospectus with the Securities and Exchange Board of India on 17 April. It had received regulatory nod for the IPO on 9 June.


Capacit’e is engaged in the construction of buildings, including super high-rise structures, and factories, for large real estate developers, corporates and institutions. It has more than 1,000 personnel across multiple projects in Mumbai, Delhi-NCR and Bengaluru.

The company joins several infrastructure and construction firms that have gone public in the last 18 months, such as Shankara Building Projects Ltd, Sadbhav Infrastructure Project Ltd, PNC Infratech Ltd, MEP Infrastructure Developers Ltd and Dilip Buildcon Pvt. Ltd.

It caters to residential, commercial and institutional buildings. Its order book stood at more than Rs 4,000 crore as of 31 January.

In May this year, Capacit’e received orders worth Rs 1,500 crore from leading real estate developers, such as the Oberoi, Wadhwa, Rustomjee and Kalpataru groups in Mumbai; Emaar in Gurgaon and Ozone in Bengaluru. It has 51 ongoing projects, according to the IPO prospectus.

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