By 3 pm, the issue received bids for 83,12,15,331 units against the total size of 1,76,37,777 units, data available with NSE showed. This has made it the first issue of 2019 to see subscription of 10 times or more. The IPO is the biggest hit since HDFC AMC IPO which received a staggering 82.99 times bids in July last year.
Excluding Polycab offering, a total of 6 issues have hit the primary market this year. Metropolis Healthcare had been the most successful so far with 5.83 times subscription.
At the upper limit, Polycab India IPO is demanding 21.6 times FY18 earnings. Peers Finolex Cables trades at 20 times and KEI Industries at 22.8 times FY18 earnings.
On the block are fresh issue of equity shares, aggregating up to Rs 400 crore, and offer for sale (OFS) of 17,582,000 shares. The company has raised Rs 401 crore from 25 anchor investors. The price band for the issue has been fixed at Rs 533-538.
Sharekhan said the valuations sought are much lower than the industry average, but almost at par with close peers like KEI Industries and Finolex cables.
Expansion into new products (like green products), enhancing market share by targeting growth segments (mining, renewables etc), ramp-up in FMEG business, focus on backward integration (Ryker Plant – for copper wire rods) and good brand identity could help maintain Polycab’s potential business prospects, said Centrum Broking. The brokerage has a ‘subscribe’ rating on the issue.
