VRL Logistics IPO subscribed almost 2x on day 2

Goods and passenger transport services provider VRL Logistics Ltd's public issue got over-subscribed on day two with the issue seeing applications for 1.94 times of the issue size at the end of the second day of the issue.

All investors categories covered their portion with retail investors bidding for 2.3x the size reserved for them; HNIs & corporates (1.8x) and institutional investors (1.3x).

The bidding for shares in the IPO will close tomorrow (April 17).

VRL Logistics is the fourth company to hit the capital market with an IPO this year and the second firm backed by private equity firm New Silk Route (NSR). Last month, NSR had cut down its offer-for-sale portion after the IPO of Ortel Communications failed to attract investors. The issue did sail through after the overall issue size was reduced.

Meanwhile, VRL had already raised about Rs 140 crore (nearly $22 million) from a bunch of domestic and foreign investors that have come as anchor investors.

The firm opened its IPO with a price band of Rs 195-205 a share and is looking to raise as much as Rs 492 crore (approximately $80 million) through fresh issue of shares besides an offer for sale by promoter family, and its existing investor and private equity firm NSR. 

The proceeds of the issue would be used for expanding the company's existing fleet of goods transportation vehicles, repayment of loan and for other general corporate purposes. Of the Rs 117 crore raised through fresh issuance, it plans to purchase vehicles for Rs 64 crore and repay its debt of Rs 28 crore.

VRL had previously filed its DRHP in December 2010 but did not go ahead with the IPO.

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