Kanohar Electricals IPO subscribed over 11x so far on Day 3; GMP stands at 35%

Reports coming in for today mention that The initial public offering (IPO) of Kanohar Electricals continued to attract firm investor demand on the last day of bidding, with the offering subscribed 11.02 times as of 10:10 am on September 10, according to NSE data.

The Rs 1,055.74-crore public offering received bids for 12,88,02,691 equity shares against 1,16,93,326 shares on offer. Non-institutional market participants (NIIs) led the subscription with their portion booked 21.77 times, while the retail investor category was subscribed 8.94 times.

In the grey market, Kanohar Electricals shares were commanding a premium of 35.13 percent on September 10, according to market-tracking platform InvestorGain.

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At the upper end of the IPO price range of Rs 632, a 35.13 percent GMP indicates an implied grey-market price of around Rs 854 per share. That stated, grey market premiums are unofficial and can change rapidly depending on market sentiment. They should not be treated as an assured stock-exchange debut gain or a reflection of the firm's fundamentals.

The price range for the IPO has been set at Rs 601 to Rs 632 per equity share, with a face value of Rs 2 per share.

The minimum lot size is 23 shares, meaning retail market participants bidding at the upper price range will need to invest Rs 14,536 for one lot. Bids can be placed in multiples of 23 shares thereafter.

Under the IPO reservation structure, up to 50 percent of the net offering is reserved for qualified institutional buyers, while non-institutional market participants have an allocation of at least 15 percent. Retail market participants have been allocated at least 35 percent of the offer.

Ahead of the IPO, Kanohar Electricals boosted Rs 316.72 crore from anchor market participants. The firm allotted 50,11,424 equity shares to anchor market participants at the upper price range of Rs 632 per share.

The anchor book saw participation from 42 financial institutions from India and overseas. Market participants included Ashoka Whiteoak ICAV – Ashoka Whiteoak Emerging Markets Equity Fund, Allianz Global market participants Fund – Allianz India Equity, HSBC Global Investment Funds – Asia Ex Japan Equity Smaller Firms, VQ FasterCap Fund and HDFC Life Insurance Firm.

The Rs 1,055.74-crore IPO comprises a fresh offering of up to Rs 300 crore and an offer-for-sale (OFS) of up to 1.2 crore shares. At the upper end of the price range, the OFS component is valued at Rs 756 crore and is being offered by promoter K Sons Family Trust.

The firm plans to use Rs 64.1 crore from the fresh offering towards capital expenditure. The scheduled expenditure includes the purchase of machinery and equipment for its Gangol manufacturing facility, expansion and automation of backward integration facilities, civil construction and interior development of an office building, and sustainability initiatives.

Another Rs 155 crore from the fresh offering has been earmarked for incremental working capital requirements. The remaining proceeds will be used for general corporate purposes.

Nuvama Wealth Management and IIFL Capital Services are the book-running lead managers to the offering, while MUFG Intime India is the registrar.

The shares are anticipated to be listed on both the BSE and NSE on September 16.