Prince Pipes IPO subscribed 2 times on Day 3 on good QIB demand
The issue received bids for 4,35,78,780 shares against the issue size of 1,97,74,012 shares.
By ETMarkets.com | Updated:
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NEW DELHI: The initial public offer (IPO) by Prince Pipes and Fittings was subscribed 2.20 times on the last day of bidding process on Friday.
The issue received bids for 4,35,78,780 shares against the issue size of 1,97,74,012 shares.
Qualified Institutional Buyers (QIBs) quota was subscribed 3.53 times, Non-Institutional Investors 1.2 times and retail 1.88 times.
The issue, whose bidding process kicked off on Wednesday, is being sold in a price band Rs 177-178 per share, demanding a PE multiple of 23.5 times on a trailing basis.
Prince Pipes offers different categories of polymer pipes to plumbing, irrigation and SWR (soil waste and rainwater) segments. Products to plumbing accounts for 37 per cent of the company’s revenue, then come irrigation (32 per cent) and SWR (30 per cent).
It enjoys a market share of 5 per cent and competes with a handful of players in the organised segment that accounts for 60-65 per cent of the total pipes industry.
On Tuesday, the company raised Rs 150 crore from 8 anchor investors namely SBI Oman, Aditya Birla MF, SBI Life Insurance, HDFC Life Insurance, Mirae Asset MF, HDFC MF, Tata MF and NewMark Capital.
Analysts are wary of the outstanding litigation against the company promoters who have exposure to real estate and infrastructure businesses but believe the issue has enough on the table for a one-time listing gain.
The company has six strategically located manufacturing plants and extensive distribution network of over 1,400.
Prince Pipe’s focus on creating a strong brand recall has supported healthy sales growth over the years, IDBI Capital said.
“We recommend ‘Subscribe’ to this issue, considering healthy sales growth driven by higher volume and improvement in net profitability driven by lower interest outgo, which strengthens its near term growth prospects,” it said.
Motilal Oswal Institutional Equities noted that there are concerns over the promoter’s pledge and related party transactions. But it feels that valuations seem reasonable vis-à-vis peers, given the company’s financials and return ratios.
“Hence, investors can subscribe the IPO from a listing gains perspective,” it said.
The brokerage said the company is focusing on improving product mix to expand its margins -- 13.9 per cent as of Q1FY20. Focus will be more on Housing and Water Supply & Sanitation, it said, adding that the company also plans to take its Trubore brand (premium brand in TN) pan-India over next 3-4 years.
The issue received bids for 4,35,78,780 shares against the issue size of 1,97,74,012 shares.
Qualified Institutional Buyers (QIBs) quota was subscribed 3.53 times, Non-Institutional Investors 1.2 times and retail 1.88 times.
The issue, whose bidding process kicked off on Wednesday, is being sold in a price band Rs 177-178 per share, demanding a PE multiple of 23.5 times on a trailing basis.
Prince Pipes offers different categories of polymer pipes to plumbing, irrigation and SWR (soil waste and rainwater) segments. Products to plumbing accounts for 37 per cent of the company’s revenue, then come irrigation (32 per cent) and SWR (30 per cent).
It enjoys a market share of 5 per cent and competes with a handful of players in the organised segment that accounts for 60-65 per cent of the total pipes industry.
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On Tuesday, the company raised Rs 150 crore from 8 anchor investors namely SBI Oman, Aditya Birla MF, SBI Life Insurance, HDFC Life Insurance, Mirae Asset MF, HDFC MF, Tata MF and NewMark Capital.
Analysts are wary of the outstanding litigation against the company promoters who have exposure to real estate and infrastructure businesses but believe the issue has enough on the table for a one-time listing gain.
The company has six strategically located manufacturing plants and extensive distribution network of over 1,400.
Prince Pipe’s focus on creating a strong brand recall has supported healthy sales growth over the years, IDBI Capital said.
ADVERTISEMENT
“We recommend ‘Subscribe’ to this issue, considering healthy sales growth driven by higher volume and improvement in net profitability driven by lower interest outgo, which strengthens its near term growth prospects,” it said.
Motilal Oswal Institutional Equities noted that there are concerns over the promoter’s pledge and related party transactions. But it feels that valuations seem reasonable vis-à-vis peers, given the company’s financials and return ratios.
ADVERTISEMENT
“Hence, investors can subscribe the IPO from a listing gains perspective,” it said.
The brokerage said the company is focusing on improving product mix to expand its margins -- 13.9 per cent as of Q1FY20. Focus will be more on Housing and Water Supply & Sanitation, it said, adding that the company also plans to take its Trubore brand (premium brand in TN) pan-India over next 3-4 years.
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