Kedaara Capital-backed Mahindra Logistics Ltd made a tepid start on the stock exchanges on Friday, with its shares listing at a slight premium to the issue price before ending flat.
Shares of Mahindra Logistics began trading on the BSE at Rs 432 apiece, compared with the initial public offering (IPO) price of Rs 429, stock-exchange data showed.
The stock traded between Rs 416.15 and Rs 433.95 before closing the day at Rs 429.15. Its market capitalisation stands around Rs 3,053 crore. The BSE’s benchmark Sensex gained 0.2%.
The logistics arm of the diversified Mahindra Group is the 29th company to list on the bourses this calendar year. Of the previous 28 firms, 16 have risen on the listing day, stock-exchange data show.
The muted start by Mahindra Logistics comes after its IPO was subscribed 7.76 times. The IPO of Rs 829.35 crore ($128 million) comprised entirely a sale of 19.33 million shares by parent Mahindra & Mahindra Ltd and Kedaara Capital. The IPO resulted in nearly 27.2% stake dilution post-issue basis.
M&M, also India’s largest utility vehicle maker, and PE investor Kedaara each sold 9.66 million shares through the IPO. Mahindra Logistics didn’t sell any fresh shares.
After the issue, M&M’s stake in the logistics company has dropped to about 58.77% from 72.36%. Kedaara’s stake declined to 9.4% from about 23% it held through its investment arms Normandy Holdings and Kedaara AIF.
The company had filed its draft prospectus on 4 August and received approval from markets regulator the Securities and Exchange Board of India (SEBI) on 6 October.