Astron Paper and Board Mills IPO subscribed 5.11 times on Day 2; should you invest?

NEW DELHI: Initial public offerings ( IPO) by Astron Paper and Board Mills got subscribed 5.11 times on the second day of the bidding process on Monday.

The public offer received bids for 7,15,88,440 shares against total issue size of 1,40,00,000 shares offered by the company, NSE data till 5.00 pm showed.

The company has fixed a price band of Rs 45-50 per share for the ongoing public offer. The issue will close on December 20.

Pantomath Capital Advisors Private Limited is the book running lead manager to the offer.

The equity shares of the company are proposed to be listed on the NSE and BSE.

The company has plans to raise Rs 70 crore from the primary market to increase capacity and repay a portion of its debt.

After the initial public offer (IPO), the holding of its four promoters will reduce to 46 per cent from over 66 per cent.

Brokerage firm Ventura Securities, Choice Broking and Sushil Finance have given ‘Subscribe’ rating to the issue.

According to Choice Broking, the company has the scalable business model and operated at capacity utilization at 80 per cent during FY15-FY17 and continued to add capacities on regular basis to serve existing and additional customers. Operating cash flow (OCF) turned positive in FY15 and prudently used to fund the capex, while short-term loan has increased in order to meet the increasing working capital need.