TeamLease Services IPO subscribed over 66 times2 min read . Updated: 05 Feb 2016, 03:10 AM IST
Institutional investor and retail investor categories saw subscription of 27 and 10.6 times, respectively
Staffing services firm TeamLease Services Ltd on Thursday saw investors rush to subscribe to its initial public offer (IPO), leading to the issue being subscribed a little over 66 times, according to data available on stock exchanges. The offer opened on 2 February and closed on Thursday.
As of 7.30pm on Thursday, the share sale was subscribed 66.01 times, data from stock exchanges show. The allocation for institutional investors witnessed subscription close to 27 times, while retail investors and high net-worth individual investor categories were subscribed 10.6 and 185.2 times, respectively. Employees’ category was subscribed 1.3 times the number of shares reserved.
The firm has priced the offer in a band of ₹ 785-850 per equity share. At the upper end of the band, the firm will end up raising ₹ 423 crore.
The company on Monday raised ₹ 190 crore by issuing shares in a pre-IPO allotment to 15 anchor investors that included Goldman Sachs and Merrill Lynch.
The TeamLease share sale performance is in stark contrast to the previous IPO of auto-component manufacturer Precision Camshafts Ltd, which was subscribed just 1.89 times.
The strong investor interest for the public issue comes at a time when the benchmark BSE Sensex has lost 6.81%, or 1,779 points, since the start of the year, which had raised concerns about a large pipeline of pending IPOs.
Investment bankers to the TeamLease IPO were enthused by the investor participation and attributed the success to the quality of the company’s business and financial track record. The issue is a proxy to the labour reforms in India and is a positive long-term bet for investors, they said.
“The IPO received fantastic response and showed that investors are keen to participate in good quality paper. The fact that there are no listed peers also insulated the issue. Good quality management, highest level of corporate governance, good financial performance, and no debt on its books are just some of the elements that led to such a response to the issue despite the volatile and weak market condition," said Sumit Jalan, ECM head and director-Global Market Solutions, Credit Suisse (India).
IDFC Securities Ltd, Credit Suisse Securities (India) Pvt. Ltd and ICICI Securities Ltd are managing the offer.
TeamLease is the second IPO in 2016. TeamLease will be followed by IT security product maker Quick Heal Technologies Ltd, which is launching its IPO to raise ₹ 450 crore next week.
Last year, 21 firms raised almost ₹ 13,600 crore through the IPO route.
TeamLease is looking to raise primary capital to the tune of ₹ 150 crore through the issuance, while its private equity investors ICICI Venture and Gaja Capital are selling part of their holding in the company. In 2011, Gaja Capital and India Advantage Fund (from ICICI Venture) invested ₹ 25 crore and ₹ 75 crore in TeamLease, respectively. In 2009, Gaja Capital invested ₹ 50 crore in the firm.
TeamLease’s services span the entire supply chain of human resources in India, covering employment, employability and education. Its employment services include temporary staffing solutions, permanent recruitment services and regulatory consultancy for labour law compliance.
Swaraj Singh Dhanjal contributed to this story.