Updated: September 21, 2021 2:11:41 pm
Paras Defence IPO: The initial public offering (IPO) of Paras Defence and Space Technologies opened for subscription earlier today and got fully subscribed within minutes on the first day of bidding aided by a robust demand from retail investors.
Till 2 pm on Day 1, the IPO was subscribed 10.11 times. It had received total bids for 7,22,19,315 shares across both the stock exchanges against 71,40,793 shares on offer, data from BSE showed. The shares which are to be allocated for the qualified institutional buyers (QIBs) was not subscribed yet so far, while those of non institutional investors was subscribed 1.51 times. The retail individual investors (RIIs) segment was subscribed a whopping 19.49 times, the data showed.
The Rs 171 crore Paras Defence IPO will be available for subscription till Thursday, September 23, 2021, and the price band of the auto component maker has been fixed at Rs 165-175 per share. At the upper end of the price band, the IPO is expected to fetch Rs 170.7 crore.
The IPO comprises fresh issuance of shares worth Rs 140.6 crore and an offer of sale (OFS) of up to 17,24,490 equity stocks by promoters and existing shareholders.
Those selling shares on the OFS are promoters — Sharad Virji Shah, Munjal Sharad Shah and individual selling shareholders are — Munjal Shah, Shilpa Amit Mahajan and Amit Navin Mahajan.
Proceeds of the fresh issue would be used to fund capital expenditure requirements, to support incremental working capital needs and repayment or prepayment of loans availed by the company.
Half of the issue size has been reserved for QIBs, 35 per cent for RIIs and the remaining 15 per cent for non-institutional investors.
Paras Defence and Space Technologies is engaged in designing, developing, manufacturing and testing a wide range of defence and space engineering products and solutions. Its business is highly dependent on projects and programmes undertaken by the central government and associated entities, such as defence public sector undertakings and government organisations involved in space research.
Investors who wish to subscribe to Paras Defence IPO can bid in a lot of 85 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,875 to get a single lot of Paras Defence and Space Technologies IPO. The shares will be listed on both BSE as well as NSE.
The applicants also must note that the cut-off time for UPI mandate confirmation is Friday, September 24, 2021, upto 12:00 pm. If they fail to do so then their application may not be considered.
Anand Rathi Advisors is the book-running lead manager to the IPO while Link Intime India is the registrar of the issue.
Before heading into the IPO, Paras Defence and Space Technologies raised over Rs 51.23 crore (Rs 51,23,09,875.00) from five anchor investors in lieu of 29,27,485 equity shares at Rs 175 each, data from the stock exchanges showed.
The anchor investors include Ashoka India Equity Investment Trust Plc, Abakkus Emerging Opportunities Fund-1, Saint Capital Fund, Nippon India Mutual Fund and HDFC Mutual Fund.
The research team at Motilal Oswal Financial Services in its IPO note has recommended a “Subscribe” to the offer.
Motilal Oswal Financial Services in its IPO report said, “We like PDSTL (Paras Defence and Space Technologies Ltd) given its complex/wide product portfolio, presence in niche defence space, strong client relationship and high entry barriers. The issue is valued at 1.9x P/BV (peers avg: ~2.4x) on a post issue basis, which is reasonable. We believe PDSTL could benefit from government impetus on the defence and space expenditure. Hence we recommend Subscribe. Further given the current buoyant market and high interest for defence stocks, the issue could see listing gains as well.”
The share allotment is likely to take place on Tuesday, September 28, 2021, and the shares are expected to be listed on Friday, October 1, 2021, according to the timeline given in the red herring prospectus (RHP).
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