The initial public offering of Ahmedabad-based Shalby Ltd, which runs a chain of multi-specialty hospitals under the brand Shalby Hospitals, was covered just 20% on the first day of the issue on Tuesday.
The issue received bids for 2.93 million shares against the 14.52 million shares on offer, excluding the anchor portion, stock-exchange data showed.
The quota of shares reserved for qualified institutional buyers was subscribed 33.84% of the 4.15 million shares on offer. The retail portion, in which bids cannot exceed Rs 2 lakh, was covered 20.5% of the 7.16 million shares on offer. The portion set aside for non-institutional investors, comprising corporate bodies and wealthy individuals, saw just a handful of bids.
High-net-worth individuals (HNIs) typically bid on the final day of a public offering to keep their financing costs low. They borrow short-term capital from various avenues, barring banks, to fund their IPO applications. HNIs deploy a small fraction of their own capital—margin money—upfront. The additional capital raised through short-tenure loans helps them place large bids.
On Monday, the multi-specialty hospital chain raised Rs 150.53 crore ($23.33 million) from a bunch of anchor investors including private equity firm Indgrowth Capital and investment bank Goldman Sachs. Shalby sold 6.07 million shares to 13 anchor investors at the upper end of the Rs 245-248 price band, stock-exchange filings showed.
The company, which is looking to raise Rs 504.8 crore ($78.26 million) from the IPO, is seeking a valuation of Rs 2,678.64 crore ($415.29 million). The issue comprises a fresh issue of shares worth Rs 480 crore, besides a secondary sale of shares worth Rs 24.8 crore by promoter Vikram I Shah.
Earlier, the company had proposed to issue fresh shares worth Rs 580 crore, as per its draft red herring prospectus.
The IPO will see an 18.84% stake dilution on a post-issue basis. Based on the upper end of the price band, promoters’ holding will fall to 79.4% after the IPO from 97.86% currently.
The promoters will get three years from the date of listing to meet the regulatory guideline of minimum 25% public float for listed firms.
VCCircle had first reported in September last year that Shalby was eyeing an IPO and was in the process of hiring merchant bankers.
The firm had earlier explored raising capital via private equity funds, but then decided to list as it would allow it to raise more money.
Edelweiss Financial Services, IDFC Bank and IIFL Holdings are the merchant bankers managing the IPO.