IPO monitoring: oversubscribed Shyam Metalics issue; Sona Comstar’s offer subscribed 11% on day 1
On the first day of the tender process, the initial public offering of Shyam Metalics was oversubscribed by investors. On the other hand, the initial public offering of Sona Comstar was subscribed at 11%. Of the two, Sona Comstar is the larger offering – over 5 times the size of Shyam Metalics. Retail investors were bullish on both IPOs, shying away from being the biggest bidders so far. After a long hiatus, the IPO market saw two new public offerings opened for subscription yesterday amid market volatility. So far this fiscal year, investors have only seen two more IPOs.
Shyam Metalics subscription status
So far, qualified institutional buyers have kept a low profile and have not bid on the IPO. Non-Institutional Investors, however, tendered for 71% of the share reserved for them. Retail investors were the most active, bidding for 218% of their quota. Shyam Metalics also kept a share reserved for the firm’s employees, who bid for 27% of the share. Overall, the issue was 123% subscribed.
Investors can continue to bid on the Shyam Metalics issue until tomorrow in the price range of Rs 303 to 306 per share, in a batch of 45 shares. With soaring commodity prices across the world, Shyam Metalics is entering the market at the right time. “The steel industry is facing headwinds due to increased infrastructure spending in major economies. Nationally, the outlook is improving, resulting in a frenzy to add capacity with a high probability that demand will exceed supply, ”Angel Broking said in a note. The brokerage firm has a subscription rating on the issue.
Sona Comstar subscription
Sonal Comstar’s massive Rs 5,550 crore IPO has only been underwritten by 11% so far. Qualified institutional buyers and non-institutional investors have so far offered less than 1% of the issue. Retail investors, however, were more active in auctions for 51% of the share reserved for them.
Sona Comstar is seeking to raise funds at a price range of Rs 285-291 per share. Investors can bid for issuance in a lot of 51 shares. Sona Comstar or Sona BLW Precision Forgings is one of the world’s leading manufacturers of critical automotive components. The company offers offerings for the electric vehicle segment which make the issue an attractive bet for investors. “We love SBPFL because of its presence in the rapidly growing global electric vehicle market, its diverse portfolio across all categories and its financial strength,” Motilal Oswal analysts said, pinning a “Subscribe” rating. with a long-term view “to the IPO.
In terms of valuations, Sona Comstar is available at a PE ratio of 79 times FY21 (post-issue) earnings per share, at the high end of the price range, INDmoney said. “It’s higher than its peers. However, good companies are always expensive during IPO season, and Sona Comstar is no exception. While the company is playing well on the electric vehicle theme, there are higher investment risks. This could have an impact on yield ratios, ”they added.