Aegis Vopak Terminals IPO subscribed 35% on Day 2: GMP slips to 2.5%

The initial public offering (IPO) of storage solutions provider Aegis Vopak Terminals received a lukewarm response, with the issue subscribed just 35% by the end of the second day of bidding.

On Day 2, the IPO had received bids for 2,39,01,885 shares. The highest interest came from retail investors, who subscribed 44% of their allotted quota. This was followed by the qualified institutional buyers (QIBs), who subscribed to the issue by 43%. Meanwhile, the non-institutional investors (NIIs) subscribed just 12%.

GMP of Aegis Vopak Terminals IPO

According to market observers, the grey market premium (GMP) for Aegis Vopak Terminals has declined to Rs 6-8, implying a modest 2.55% premium over the upper end of the issue price. The GMP stood at 4% on the first day but has since weakened.

Should you subscribe to Aegis Vopak Terminals IPO?

“While the company’s strategic importance in India’s LPG and liquid bulk infrastructure space justifies a premium to some extent, the pricing seems to factor in strong future growth expectations. Investors should view this IPO as a play on long-term infrastructure and energy logistics growth, but must weigh the premium valuation against the company’s limited historical profitability and execution risks in upcoming capex projects,” said Bajaj Broking.

IPO structure

The IPO comprises a complete fresh issue of 11.91 crore shares, aggregating up to Rs 2,800 crore. There is no offer-for-sale component.

Minimum investment and lot size

Retail investors can apply for a minimum of one lot, which includes 63 shares. At the upper price band, this translates to an investment of Rs 14,805. For small HNIs, the minimum application is 14 lots or Rs 2.07 lakh.

Use of funds

The proceeds will be used to repay or prepay certain borrowings, fund the acquisition of a cryogenic LPG terminal at Mangalore, and for general corporate purposes.

IPO dates and price band

The IPO will open on May 26 and close on May 28. The price band is set at Rs 223 to Rs 235 per share. The shares are expected to list on the BSE and NSE on June 2.

Financial performance

In FY24, the company posted a revenue of Rs 570.12 crore and a net profit of Rs 86.54 crore. For nine months ended Dec 2024, PAT stood at Rs 85.89 crore.

Book running lead managers

ICICI Securities, BNP Paribas, IIFL Securities, Jefferies India, and HDFC Bank are managing the issue, while Link Intime is the registrar.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)