Dilip Buildcon IPO gets subscribed 9% on Day 1
The Dilip Buildcon IPO received bids for 1.9 million shares, led by retail individual investors
New Delhi: The initial public offering (IPO) of construction and road developing company Dilip Buildcon Ltd, excluding the anchor allotment, was subscribed 8.8% on Monday, the first of the three-day issue, which will close on Wednesday.
As of 6pm, the IPO had received applications for 1.9 million shares, led by retail individual investors. The company and existing shareholders are selling 21.36 million shares, according to information on the stock exchanges.
Retail individual investors, whose investments cannot exceed Rs.2 lakh in an IPO, applied for 17.5% of the 10.61 million shares on offer, stock exchange data showed.
The institutional investor book did not receive any bids, while the non-institutional category, comprising high-net-worth individuals, was subscribed 1.02%.
On Friday, DBL raised Rs.196.19 crore by allotting shares to anchor investors. The firm sold a little more than 8.95 million shares to 10 anchor investors at Rs.219 apiece, the upper end of the Rs.214-219 price band. Investors acquiring shares in the anchor allotment include SMALLCAP World Fund Inc., Abu Dhabi Investment Authority, HDFC Trustee Co., Nomura Singapore Ltd and DB International Ltd. 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.
Through the IPO, the firm and its promoters aim to raise a total of Rs.664 crore through fresh issue of shares and share sales by Dilip Suryavanshi, Devendra Jain and private equity fund BanyanTree Growth Capital.
BanyanTree, which currently holds about 9.75% in the company, will sell a stake of about 6%, or 7.95 million equity shares, through the IPO.
The firm proposes to use the net proceeds of the fresh issue for prepayment or repayment of a portion of term loans, and for working capital.
Axis Capital Ltd, IIFL Holdings Ltd, JM Financial Institutional Securities and PNB Investment Services Ltd are lead managers to the issue.
Bhopal-based Dilip Buildcon, which in 1989 started out with a real estate construction business, and later entered water treatment and sewage treatment, builds roads, dams, canals and residential buildings on an EPC (engineering, procurement and construction) basis.
This is the firm’s second attempt at an IPO. Last year, it had planned to raise about Rs.650 crore through a public issue of fresh equity shares, but had backed off, citing the cautious sentiment of foreign institutional investors towards the sector.
Several of its peers, including Sadbhav Infrastructure Projects Ltd, Ashoka Buildcon Ltd and IRB Infrastructure Developers Ltd, are already listed on the bourses.
The IPO market in 2016 has regained the momentum that was witnessed in 2015, when 21 firms went public, raising Rs.13,614 crore. So far this year, 15 firms have raised about Rs.10,500 crore through IPOs, according to data from Prime Database, a primary market tracker.
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