Infrastructure developer HG Infra Engineering Ltd’s initial public offering was subscribed almost five times on the final day on Wednesday with support from institutions and retail investors, and last-minute bids from wealthy investors.
The public offering of 12.13 million shares, excluding the anchor allotment, received bids for nearly 60.17 million shares, stock exchange data showed.
The qualified institutional buyers’ book was subscribed nearly 8.4 times. Institutional investors had not bid a single share in the two days prior.
The quota reserved for high net-worth individuals was subscribed five times at the end of bidding, after seeing just 26% bids in the afternoon.
The portion set aside for retail investors, whose bids value cannot exceed Rs 2 lakh per application, was covered three times the shares reserved for them.
The IPO was subscribed 11% on the opening day on Monday. It picked up pace on Tuesday and was covered 45%.
The company is seeking Rs 1,759.62 crore in valuation from the public issue. The total issue size is pegged at Rs 462 crore at the upper end of the Rs 263-270 price band. HG Infra is issuing fresh shares worth Rs 300 crore while its promoters are selling 6 million shares worth Rs 162 crore.
On Friday, HG Infra raised Rs 138.59 crore ($21.5 million) by selling 5.13 million shares at Rs 270 apiece to 11 anchor investors.
The promoters' stake will fall 26.25% post the IPO at the upper end of the price band. This will help the company comply with the Securities and Exchange Board of India's (SEBI) rule of a minimum 25% public float for listed entities.
HG Infra had filed its draft proposal with SEBI on 28 September last year. It received regulatory nod to float an IPO on 13 December.
The company will use Rs 90 crore to buy equipment, Rs 115.7 crore to repay debt and an undisclosed amount on general corporate purposes.
SBI Capital Markets and HDFC Bank are the merchant bankers managing the IPO. Choice Capital is the adviser on the IPO.
HG Infra joins listed peers such as Capacit'e Infraprojects Ltd, Bharat Road Networks Ltd, Shankara Building Projects Ltd, PSP Projects Ltd, Dilip Buildcon, Sadbhav Infrastructure Project Ltd, PNC Infratech Ltd and MEP Infrastructure Developers Ltd. All these companies went public in the last three years.
Other companies in the segment that are looking to float IPOs include GR Infraprojects Ltd and GVR Infra Projects Ltd.
HG Infra was incorporated in January 2003. It builds highways, bridges and flyovers. It has also executed water pipeline projects. The company has completed 12 projects during the last five years. It had 29 ongoing projects in the roads and highways sector with an order book of Rs 3,811.49 crore as on July 2017.
