Endurance IPO covered 12% on day 1; Singapore’s GIC among anchors

Auto components maker Endurance Technologies Ltd recorded a slow start to its initial public offering (IPO) with the issue covered around 12% at the end of first day.

Retail investors led the show bidding for 21% of the portion reserved for them. Institutional and high net-worth individuals & corporate investors portion was covered 4% and 2%, respectively.

Earlier, a day ahead of the public issue, Singapore’s sovereign wealth fund GIC joined others to come as an anchor investor in Endurance.

GIC that has a large public equities portfolio and has participated in several IPOs as an anchor investor brought in Rs 25 crore ($3.7 million) as part of a larger share sale. Combined with several portfolio and mutual fund investors, Endurance raised Rs 348.5 crore.

The IPO comprises an offer for sale where its private equity backer Actis is selling its entire stake.

The Aurangabad-based company has set a price band of Rs 467 to Rs 472 apiece for the IPO that opens on Wednesday and closes on Friday. It is seeking a valuation of as much as Rs 6,640 crore ($1 billion).

The issue is an offer for sale of 24.6 million shares by its five-year-old private equity investor Actis and promoter Anurag Jain. Actis is selling 19.29 million shares while Jain is selling 5.3 million shares. The company isn’t issuing any fresh shares. The issue will constitute up to 17.5% of the company’s post-offer capital.

This is Endurance’s second attempt to go public. The firm had earlier filed its draft red herring prospectus with the capital markets regulator Securities and Exchange Board of India in September 2011 but withdrew it in November 2011. It filed for an IPO again in July this year.

This is the second portfolio firm of Actis looking to go public. Earlier, AGS Transact had received approval for its IPO but did not go ahead with the planned issue.

Endurance is among around two dozen firms that are in the queue to go public. Of these, three-fourths have a PE firm as a shareholder and in many cases the investor is looking to partly or fully exit the respective private firms.

The auto parts maker was founded in 1999 as Endurance Suspension Systems (India) Pvt. Ltd. It went through a group consolidation and changed its name in 2010. It claims to be the largest two-wheeler and three-wheeler automotive component manufacturer in India in terms of aggregate revenue for FY15 in its selected product segments.

The company’s net sales grew 6.6% to Rs 5,240.6 crore for the year through March 2016 from Rs 4,916.9 crore the year before. Net profit rose 15% to Rs 291.2 crore.

Axis Capital and Citigroup are managing the issue.

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