Ahmednagar-based Prabhat Dairy Pvt Ltd's shares made a tepid debut after a poor reception to its initial public offer (IPO) where its private equity investors had to cut their offer-for-sale portion of the issue to see through the public offer.
The shares listed on Monday at Rs 113 each on NSE and at Rs 115 a unit on BSE, against the issue price of Rs 115.
Shares of the Maharashtra-based integrated milk and dairy company touched a high of Rs 120 intra-day and low of Rs 112.4 each on BSE, and last traded at Rs 116.35 a piece, in a flat Mumbai market.
The firm had extended the issue closure by three days and also cut the price band from Rs 140-147 a share to Rs 115-126, after it failed to clear the ropes on the third and final day on September 1. It also offered a discount of Rs 5 a share to retail investors.
Only the non-institutional and non-retail portion of the issue was subscribed fully, that too led by corporate investors.
While the QIB portion was covered around 88 per cent, the corporates and HNIs’ portion was oversubscribed 42 per cent. The portion of the issuer reserved for retail investors saw the worst reception despite the extra price discount and was covered around 26 per cent only.
Prabhat Dairy, an integrated milk and dairy products company catering to institutional as well as retail customers, had offered 36.4 million equity shares to raise up to Rs 300 crore through a fresh issue besides an offer for sale of up to 147 million equity shares.
Rabo India PE and French development financial institution Proparco part exited, more than doubling their investment value in the process.
Incorporated in 1988, Prabhat Dairy markets dairy products under Prabhat, Flava and Milk Magic brands. It is a regional player with operations mainly in Maharashtra.
As of March 15, 2015, the company had an aggregate milk processing capacity of 1.5 million litres per day. The poor response to its issue is also a blow for the dairy sector at large that has attracted a lot of private capital over the last few years.
Edelweiss Financial Services, Macquarie Capital Securities and SBI Capital Markets are the book running lead managers to the issue.
