Subhkam Ventures, HT Media and Enam Securities-backed Aqua Logistics, it appears, has failed to attract investors for its maiden issue. The issue managers-- Saffron Capital and Centrum Capital, has now extended the time period for closing the issue (originally slated for January 25-28) to February 2. Moreover, the price band has been revised down from Rs 220-230 per share to Rs 200-225 per share.
As per subscription data for the original deadline, investors applied for a total of a little less than 45 lakh shares as against the total shares on sale of 67 lakh.
It appears Aqua Logistics is the first company to see its issue failing to get through in the last two years. Although some other IPOs such as that of television cable company Den Networks came close to being devolved, they managed to sail through in the dying hours of the issue.
Incidentally, the issue found no takers among the institutional investors and the QIB portion did not see even a single application as of the penultimate day of the IPO (January 27). Even on the last day just about 10% of QIB portion was subscribed. The subscription however was led by retail investors for whom there was an inbuilt discount in the issue.
The crash in the stock market this week could be an added factor why the issue failed to cut ice. Some analysts had advised investors against going for the issue arguing that it appeared priced at a premium.
Aqua Logistics was looking to raise Rs 150 crore through its public issue at the upper end of the price of Rs 220-230. At the lower end of the new price band Aqua Logistics will be able to raise Rs 135 crore, 10% less than what it targeted to scoop from the market. The firm was eyeing a valuation of around Rs 450 crore or a little less than $100 million with equity dilution of as much 33% stake.
It was to invest the money in purchasing equipment, working capital requirements besides other expansion activities including acquisitions. Enam had invested around Rs 14 crore days before the stock market crash in January 2008 and is estimated to have average cost of acquisition of shares at Rs 95.
Media house HT Media (likely through ad-for-equity) is said to have invested Rs 5 crore in the company with average cost of ownership of around Rs 215 in August 2008 with a follow-on allotment few months ago. Subhkam Ventures, a domestic private equity firm founded by Rakesh Kathotia, which also owns broking entities Subhkam Stocks & Shares Ltd and Subhkam Securities, had invested around Rs 11 crore in August 2009 at Rs 225/share.
Aqua, which started as a freight forwarding company a decade back, is a third party logistics service provider that clocked revenue of Rs 214 crore for the year ended March’09 with net profit of Rs 9.8 crore.
The company is co-promoted by Rajesh Uchil, MS Sayad, Harish Uchil and Gopalkrishna Uchil who have a background in logistics business through other entities including partnership firms. As of now, the promoters together own 65% in the company which is likely to drop down to around 44% post issue.
Enam, Subhkam Ventures and HT Media hold around 11%, 3.7% and 1% respectively in the firm which would come down proportionately to around 7.5%, 2.5% and 0.7% post issue. Another investment firm Carwin Mercantiles had invested Rs 10 crore in November 2007.