Adroit Industries IPO fully subscribed within 2 hours of issue opening; GMP at 20%

Fresh updates from the financial markets indicate that Adroit Industries (India) opened its initial public offering (IPO) today, with the offering getting fully subscribed in the first two hours, with the offering receiving 1.5 times subscription, as of 11:50 am on September 23, according to NSE data.

The Rs 150.7 crore IPO received bids for 1,17,74,880 shares against 78,72,900 shares on offer. The demand was led by retail market participants, whose portion was subscribed 2.28 times. The non-institutional investor (NII) category was subscribed 1.65 times.

In the grey market, Adroit Industries shares were commanding a premium of nearly 20% over the upper end of the IPO price range on the morning of September 23, according to InvestorGain.

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The firm has set the IPO price range at Rs 126-134 per share. At a GMP of around 20%, the grey market indication suggests a premium of around Rs 27 per share over the upper price range of Rs 134.

That stated, the grey market premium is an unofficial indicator and should not be considered a guarantee of the stock's stock-exchange debut price.

The IPO opened for subscription on September 23 and will close on September 25. The offering comprises a fresh offering of 98.97 lakh shares and an offer for sale (OFS) of 13.5 lakh shares by promoter entity Mukesh Sangla HUF.

The firm had mobilised Rs 45.21 crore from six anchor market participants ahead of the IPO. It allotted 33.74 lakh shares to the anchor market participants at the upper end of the price range of Rs 126-134 per share.

Among the anchor market participants, Abakkus Venture Opportunities Fund acquired 7.46 lakh shares worth Rs 10 crore. The fund already held a 3.18% stake in Adroit Industries before the IPO.

Chhattisgarh Investments additionally picked up 7.46 lakh shares, while Valour Capital Trust and Cognizant Capital Dynamic Opportunities Fund each acquired 5.59 lakh shares worth Rs 7.5 crore.

Aarth AIF Expansion Fund bought 3.88 lakh shares for Rs 5.2 crore, while Fortune Hands Expansion Fund Scheme acquired 3.73 lakh shares for Rs 5 crore.

Adroit Industries plans to use Rs 63.8 crore from the net fresh offering proceeds for procuring machinery and equipment to enhance operations at its Dewas and Pithampur facilities. The funds will additionally be used to purchase transportation vehicles for the movement of goods between its manufacturing facilities.

Another Rs 24.1 crore has been earmarked for repayment of debt of its subsidiary, Adroit Driveshafts. The remaining proceeds will be used for general corporate purposes.

Adroit Industries is a Madhya Pradesh-headquartered manufacturer of propeller shafts and torque-transmission components used in driveline systems. The firm has manufacturing facilities in Dewas, Pithampur and Sanwer, and offers more than 5,000 torque-transmission components and assemblies.

Choice Capital Advisors is the sole merchant banker managing the Adroit Industries IPO. The shares are scheduled to list on the NSE and BSE.