BackQuess Corp IPO subscribed 0.41 times on Day 1
As of 5.30pm on Wednesday, the IPO received applications for 2.88 million shares led by institutional category investors
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Mumbai: The initial public offering (IPO) of Quess Corp. Ltd, excluding the anchor allotment, was subscribed 41% on day one of the three-day offering. The issue closes on Friday.
As of 5.30pm on Wednesday, the IPO received applications for 2.88 million shares led by institutional category investors. The company has offered to sell 7.09 million shares on offer.
Retail individual investors, whose investments cannot exceed ₹ 2 lakh in an IPO, book drew 2.19 times the demand against 1.26 million shares on offer, stock exchange data showed.
The institutional investor category did not garner a single bid, while the non-institutional category comprising high net-worth individuals was subscribed 5% or 0.05 times.
On Tuesday, Quess Corp. raised ₹ 180 crore by allowing shares to anchor investors. The firm sold 5.67 million shares to 15 anchor investors at ₹ 317 apiece, the upper band of the ₹ 310-317 price band for the issue.
Institutions that participated in the anchor book include Fidelity Investments, Kuwait Investment Authority, ICICI Prudential MF, HDFC MF, Nomura, Harvard Management Co., DSP BlackRock, Wasatch, Pictet, and Grandeur Peak, according to the stock exchange data.
The anchor book is that portion of an IPO which bankers allot to institutional investors on a discretionary basis. Anchor book subscription opens a day before the IPO launch and is an indicator of institutional investor interest.
Bengaluru-based Quess Corp. plans to raise ₹ 400 crore through the sale of new shares.
The proceeds will be utilized towards repayment of debt, capital expenditure as well as working capital requirements, and funding acquisitions and other strategic initiatives.
Quess Corp. is a business services provider in which 69.55% stake is owned by Thomas Cook (India) Ltd, which in turn is owned by Canadian billionaire Prem Watsa’s Fairfax Financial Holdings Ltd (FFHL).
FFHL owns 67.82% stake in Thomas Cook.
Quess Corp. offers business services, including recruitment, temporary staffing, technology staffing, IT products and solutions.
The company reported revenue of ₹ 3,442.4 crore in fiscal year 2016 (12 months) compared with ₹ 2,572.8 crore in fiscal year 2015 (15 months).
Net profit grew to ₹ 88.5 crore in FY16 compared with ₹ 67.2 crore for FY15.
Ajit Isaac, chairman and managing director and chief executive, Quess Corp., last week told reporters that strategic acquisitions have helped contribute 20% of the company’s total revenue and it has a track record of successful inorganic growth through such acquisitions.
Isaac highlighted a four-point plan in a media presentation as the way forward for Quess Corp. The company aims at expanding its service portfolio and operations through strategic acquisitions that complement existing operations. It also aims at capitalizing growth in e-commerce in India and pursue other business-to-consumer opportunities as well as improve operating margins, among other things.
Axis Capital Ltd, ICICI Securities Ltd, IIFL Holdings Ltd, and Yes Securities (India) Ltd are financial advisers to Quess Corp’s IPO.
Quess Corp is the 12th company this calendar year to tap primary markets.
Last week, Mahanagar Gas Ltd saw its ₹ 1,040 crore IPO get subscribed 64.5 times.
Ten other companies have tapped the capital markets to raise a total of ₹ 6,743 crore this year. Last year, 21 companies raised ₹ 13,614 crore, according to data from primary market tracker Prime Database.
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