PE-backed Prince Pipes’ IPO sails through on final day
Photo Credit: VCCircle

The initial public offering (IPO) of PVC pipe manufacturer Prince Pipes and Fittings Ltd was fully subscribed on the final day on Friday as individual investors as well as institutions continue to bid for its shares.

The offering of 19.77 million shares, excluding the anchor allotment, received bids for nearly 43.72 million shares, stock-exchange data showed. The book was subscribed 2.22 times.

Retail investors bid for 1.88 times the shares reserved for them while the institutional buyers’ portion received bids for a little over 3.5 times of the quota set aside for them.

Non-institutional, non-retail investors comprising corporate bodies and high net-worth individuals (HNIs) bid for nearly 1.2 times the shares reserved for them.

On the grey market, shares of Prince Pipes were quoting at a premium of Rs 8-10 apiece over its price band of Rs 177-178 apiece, two grey market dealers told VCCircle.

The IPO was subscribed 28% on its first day on Wednesday. It picked up pace on the second day on Thursday with nearly 75% subscription.

A day ahead of the IPO, Prince Pipes raised 150 crore ($21.1 million at current exchange rates) from a bunch of anchor investors including mid-market private equity firm Oman India Joint Investment Fund (OIJIF).

A fortnight before the IPO, the company had roped in mid-market growth-equity firm and clean-tech investor Global Environment Fund (GEF) as an investor. GEF’s South Asia Growth Fund II, focused on energy and water efficiency in India and Bangladesh, infused Rs 106 crore ($15 million) for a roughly 5.5% stake on a post-IPO basis.

Prince Pipes, which makes PVC pipes for plumbing, irrigation and sewage works, is seeking Rs 1,958.45 crore ($277 million at current exchange rates) in valuation through the IPO.

The Rs 500-crore IPO comprises a fresh sale of shares worth Rs 250 crore and a secondary sale worth Rs 250 crore by the promoter and members of the Chedda family.

Prince Pipes had originally filed for an IPO in September 2017. It had received regulatory approval in November the same year. At that point, it was looking to raise Rs 700 crore. However, macro-economic factors and global events resulted in a sharp decline in the stock market, including its listed peers, prompting the firm to put the IPO on ice.

In October 2018, the company had filed a revised draft red herring prospectus and cut its offer size to Rs 600 crore.

Now, the company will utilise the fresh net proceeds to repay loans. It will also use the money to finance a new manufacturing facility, upgrade equipment at existing factories and for general corporate purposes.

JM Financial Institutional Securities Ltd and Edelweiss Financial Services Ltd are the merchant bankers managing the share sale.

Leave Your Comment(s)