The institutional investor portion of the issue was subscribed 6.4 times, while the retail portion was subscribed 1.6 times
Mumbai: The initial public offer (IPO) of logistics firm Navkar Corp. Ltd sailed through the choppy secondary markets but saw low interest from high net-worth individuals (HNIs). The issue was subscribed 2.84 times as of 6pm on Wednesday, the last day of subscription, data from stock exchanges show.
The institutional investor portion of the issue was subscribed 6.4 times, while the retail portion was subscribed 1.6 times. Interest from HNIs was low with subscription coming in at just 0.89 times of the portion allotted to this segment.
Navkar was looking to raise ₹ 600 crore through the IPO and had priced its shares at ₹ 147-155. The issue opened on Monday.
So far this year, 10 firms have raised ₹ 4,672 crore through IPOs, according to data from primary market tracker Prime Database.
“There was an impact of the crash and volatility, but despite all of that retail investor interest was strong as shown by the subscription figure for the category. HNI interest, however, was impacted severely," said an investment banker involved in the issue, requesting anonymity as he is not authorized to speak to the media.
On Monday, the benchmark BSE Sensex fell 1,625 points to close at 25,741 points following a sharp sell-off in the Chinese equity markets.
In normal times, the issue could have easily seen a subscription of more than 20 times the issue size, he said while adding that the logistics sector is a very attractive space for investors.
The last time a logistics firm came to the market was in April this year when VRL Logistics saw its IPO subscribed almost 74 times.
Navkar’s issuance included a primary offering of shares of up to ₹ 510 crore as well as an offer for sale of ₹ 90 crore by an existing shareholder, part of the promoter group.
Navkar operates three container freight stations (CFS) close to the Jawarharlal Nehru Port, the country’s largest container port, near Mumbai.
On 31 May, its CFSs had an aggregate installed handling capacity of 310,000 TEUs per annum. TEUs stands for twenty-foot-equivalent-units, which is a measure of cargo capacity. The firm also operates a private railway freight terminal.
Navkar plans to use the funds from the IPO to increase the capacity of its CFS, development of the non-notified areas of its CFS and the establishment of a logistics park at Valsad, Gujarat.
In 2014-15, Navkar reported revenue of ₹ 332 crore, a drop of almost 10% compared to the previous year’s revenue of ₹ 370.1 crore. The firm also reported a fall in its net profit to ₹ 74.3 crore in fiscal year 2015 from ₹ 90 crore the previous year.