Motilal Oswal Investment Advisors Pvt Ltd and Centrum Capital Ltd, the Book Running Lead Managers, have withdrawn the public issue of personal and home care products maker Galaxy Surfactants Ltd one day ahead of its closure, after poor response from HNIs and retail investors.

The issue which sought to raise up to Rs 201 crore by selling a quarter of the company’s shares, was subscribed just 30 per cent on the eve of the penultimate day. It opened last Friday and closed to institutional investors on May 18, and was to close for other investors on Thursday.

The institutional investors’ portion was subscribed 59 per cent while the non-institutional segment (which includes HNIs) saw just 4 per cent subscription till the penultimate day. The retail portion was subscribed just 11 per cent.

It is surprising that the merchant bankers pulled out the issue (the first such case this year although there was Milestone Capital which decided to pull out after filing the draft prospectus but before launching the issue), as it is not unusual to see many issues getting fully subscribed on  the final day. However, the BRLMs may have sensed the headwind, given the poor sentiments surrounding the secondary stock market.

The issue found few takers in spite of managing to raise Rs 30.24 crore or $6.7 million from three anchor investors – ICICI Prudential Life Insurance Company, Goldman Sachs India Fund and Arohi Asset Management Pte, as a precursor to its maiden public issue. ICICI Prudential Life Insurance Company subscribed to the bulk of the anchor investor portion, investing over Rs 17 crore or $3.8 million. Goldman Sachs India Fund pitched in with Rs 3 crore or $0.7 million while Arohi Asset Management Pte Ltd, under Arohi Emerging Asia Master Fund, invested Rs 10 crore or $2.2 million.

The three anchor investors picked the shares at Rs 340 a piece, the upper end of the IPO price band of Rs 325-Rs 340 a share.

Galaxy intended to utilise the net proceeds of the issue to fund the capital expenditure of its step-down subsidiary Galaxy Chemicals (Egypt) S.A.E. It also planned to part-fund the capital expenditure for setting up a new manufacturing facility at Jhagadia in Gujarat and expanding the capacities of its existing manufacturing units at Taloja and Tarapur from the IPO money. Now, it may need to look for private equity funding to see through these investments.

Last year, communications firm Fatpipe Networks India had to withdraw its Rs 49 crore issue as it could not sail through in spite of revising the price band downwards and extending the issue closure date. Keynote Corporate was its BRLM. Another issue which was pulled out last year was that of Tara Health Food, which was being managed by Atherstone Capital.

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