Carraro India, a manufacturer of transmission systems, had a poor stock market debut on Monday, December 30, as its shares were listed on the NSE at a discount of more than 7.5 per cent.
The company’s shares began trading on the NSE at Rs 651 per share, which was 7.53 per cent less than the issue price of Rs 704 per share, according to stock exchange data.
Negative listing gain
The mute listing further dampened the interest of investors who purchased shares in IPO. 21 shares was the minimum bid amount for individual IPO investors. A minimum of one lot in the Carraro India issue would have lost IPO investors Rs 1,113 per lot at the NSE listing price.
The listing price of Rs 651 made the single lot worth Rs 13,671 (Rs 651 x 21), and the issue price was Rs 14,784 (21 x Rs 704).
IPO size, price band and subscription
Through its initial public offering, which was available for subscription from December 20 to December 24, transmission system manufacturer Carraro India raised Rs 1,250 crore. An OFS of 1.77 crore equity shares was offered in the IPO, with a price range of Rs 668 to Rs 704 per share.
Even though retail and non-institutional investors did not respond well to the Carraro India IPO, it closed with a 1.12 times oversubscription number.
It was booked 2.21 times for qualified institutional buyers (QIBs). 71 per cent of the quota was reserved for retail investors, whereas 60 per cent was reserved for non-institutional investors.
Use of IPO proceedings
In the public offering, 1.77 crore shares of Carraro India Ltd. were offered for sale by selling shareholders. The selling shareholders will therefore receive all of the IPO’s proceeds.
In addition to giving its current shareholders liquidity, the company anticipates that listing the equity shares will improve its brand recognition and visibility.
