Wonderla IPO subscribed 38x

Wonderla Holidays Pvt Ltd, which runs two amusement parks and one resort in the country, saw strong investor interest with its initial public offer (IPO) recording applications for 38.06x the issue size or oversubscription of 37 times the size.

This marks a positive development for the primary market which has been virtually shut for more than a year since Just Dial went public last May. Many firms withdrew their proposed IPOs despite the secondary market seeing sparkle and rising to hit new highs as the country approached the general elections.

The last big IPO to see large oversubscription was that of rating agency CARE, which recorded 40x oversubscription in late 2012.

Wonderla was the first significant IPO to sail through in India in a year and the biggest IPO in the hospitality sector since Mahindra Holiday & Resorts floated its IPO five years ago.

The issue was subscribed 42 per cent at the end of day 1, led by bids from institutional investors. It almost hit a home run with its public issue seeing 98 per cent subscription on day 2 with retail investors backing the issue.

On the final day non institutional-non retail investor category representing corporates and HNIs were the biggest buyers. Data collated by stock exchanges show this set of investor category oversubscribed their portion of the issue more than 158x. QIB portion was oversubscribed 15.7x while the retail portion was oversubscribed 6.5x.

Earlier, TVS Capital and Aditya Birla Private Equity picked a little over 1 per cent each in Wonderla for Rs 18.12 crore ($3 million). The two PE firms joined HDFC Infrastructure Fund, a part of the country’s top mutual fund house, to come in as anchor investors in the IPO of Wonderla.

Aditya Birla PE picked 1.1 per cent for Rs 8.4 crore while TVS Capital picked 1.37 per cent in Wonderla for Rs 9.72 crore.

The anchor investors picked shares at Rs 125 each, the upper end of the price band of Rs 115-125 a share for the IPO. At the upper end of the price band the company would be able to raise up to Rs 181.2 crore, valuing it at around Rs 706 crore ($118 million).

Edelweiss and ICICI Securities are the book running lead managers to the IPO.

Wonderla is raising capital to build a new amusement park in Hyderabad, which requires an investment of Rs 250.7 crore. The company has acquired 49.57 acres of land for this amusement park.

Wonderla has already invested Rs 22.6 crore for this and hopes to raise around Rs 173 crore through the IPO, with the rest being raised through debt.

Over the past few years, the company saw positive growth in its revenue and profit margins. It clocked revenues of Rs 69.7 crore in FY10, which rose to Rs 91.2 crore in FY11, Rs 114.5 crore in FY12 and Rs 139.17 crore in FY13 and for the first nine months of the last fiscal ended December 31, 2013, clocked Rs 121.5 crore.

Promoted by Kochouseph Chittilappilly and his son Arun Chittilappilly, Wonderla started its first amusement park in Kochi in 2000 and the second unit in Bangalore in 2005, following which it started its first resort.

This will be the second firm of the promoters to go public. They had previously taken V-Guard Industries Ltd to the market. V-Guard, which counts Nalanda Capital as a large institutional shareholder, manufactures voltage stabilisers, pumps & motors, electric water heaters, solar water heaters, cables, UPSs and ceiling fans.

(Edited by Joby Puthuparampil Johnson)

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