The initial public offering of staffing services company TeamLease Services Ltd gained momentum on Wednesday and had received bids for around 89 per cent of the issue size at the end of the second day, stock-exchange data showed.
The IPO subscription, which made a slow start on day one, was led by retail investors on the second day as well. The portion reserved for retail investors was subscribed more than four times on day two, with one day to go.
Qualified institutional buyers and non-institutional investors, who hadn’t bid at all on the first day, bid for 28 per cent and 4.6 per cent, respectively, at the end of day two, the data showed.
The company has priced its shares in a band of Rs 785-850. The issue is expected to fetch as much as Rs 423 crore at the upper end of the band. This includes up to Rs 150 crore (around $22.6 million) through a fresh issue of shares.
It is the second IPO this year, after that of auto-parts maker Precision Camshafts Ltd.
The TeamLease IPO also includes an offer for sale of around 1.5 million shares each by entities related to Gaja Capital and ICICI Venture and of 153,321 shares by the promoters. The selling shareholders will pocket as much as Rs 274 crore from the issue. The issue will close on Thursday.
From the proceeds of the fresh issue, the company plans to use around Rs 80 crore for existing and incremental working capital requirements, Rs 25 crore for acquisitions and other strategic initiatives, and Rs 15 crore for upgrade of IT infrastructure.
TeamLease mainly offers temping services where it provides temporary workforce to its clients in bulk on a contract. This allows clients to hire without adding to their direct employee base. This employment and business model is closely associated with sectors like manufacturing, banking, BPO and retail, among others. However, temping also encompasses senior-level short-term flexi managers. TeamLease also offers permanent staffing services.
IDFC Securities Ltd, Credit Suisse Securities (India) Pvt Ltd and ICICI Securities Ltd are the Book Running Lead Managers to the offer.