PSP Projects IPO subscribed 11% on Day 1
Mumbai: The initial public offering (IPO) of PSP Projects, an Ahmedabad-based construction company, got off to a slow start on the day one, receiving investor demand for 11% of the shares on offer, according to the data available with the stock exchanges.
As of 5pm on day one, while the quota for non-institutional investors comprising corporate bodies and wealthy individuals was subscribed about 15%, retails investors bid for about 38% of the shares reserved for them. The qualified institutional investor did not bid at all on the day one.
The company has fixed a price band of Rs205-210 per share. It plans to sell as many as 10.08 million shares, which at the upper end of the price band will fetch the company and its promoters a total of Rs211.6 crore, including a primary fund raise of Rs151 crore. This will result in an overall dilution of 28% on a post-issue basis.
The issue closes on 19 May.
Ahead of the IPO, PSP allotted 4.53 million shares to nine institutional investors at the upper end of the price band, raising about Rs95.25 crore. The anchor book allocation of the company saw subscription from investors such as Reliance Mutual Fund, SBI Mutual Fund, Axis Mutual Fund, Sundaram Mutual Fund and Birla Sun Life Insurance.
With this, PSP Projects will join several infrastructure and construction firms that are either planning to for public issues or have completed IPOs to list on bourses.
Other infrastructure firms that went public in the past around two years include Shankara Building Projects Ltd, Sadbhav Infrastructure Project Ltd, PNC Infratech Ltd, MEP Infrastructure Developers Ltd and Dilip Buildcon Pvt. Ltd.
PSP Projects had filed draft prospectus for an initial share sale on 29 December 2016 and received regulatory clearance on 24 March.
Karvy Investor Services Ltd and Motilal Oswal Investment Advisors Ltd are managing the initial share sale.
PSP Projects reported revenue of Rs467.7 crore for the year ended 31 March 2016, as compared with Rs286.9 crore in the previous year. It posted a profit of Rs24.9 crore for FY 2015-16, as against Rs14 crore in the previous year. For the nine months ended 31 December, the company posted revenue of Rs249.4 crore.
PSP Projects offers a range of construction and allied services across industrial, institutional, government and residential projects in India. The services offered include planning and design as well as construction and post-construction activities. Since its incorporation in August 2008, the company has executed 80 projects.
Gujarat has been the company’s focus region, though it has recently started bidding for projects across India.
Some of the major projects handled by PSP Projects include the construction of GCS Medical College, Hospital and Research Centre (managed by the Gujarat Cancer Society) and the Zydus Hospital at Ahmedabad, and various works in relation to the Sabarmati Riverfront Development project at Ahmedabad.
PSP Projects’s client list includes Cadila Healthcare Ltd, Care Institute of Medical Sciences Ltd (CIMS), Claris Injectables Ltd, Emcure Pharmaceuticals Ltd, Gelco Electronics Pvt Ltd, government of Gujarat, Intas Pharmaceutical Ltd, Amul Dairy, Nirma Ltd and Torrent Pharmaceuticals Ltd.
The company’s total order book, as of 31 March, stood at Rs729.1 crore, comprising 17 institutional projects, four industrial, four government and two government residential projects.