After getting strong response to its initial public offering (IPO), white oil manufacturer Gandhar Oil Refinery (India) is likely to get listed with a 45 percent premium to its issue price on November 30.
The Gandhar Oil stock may get be listed at Rs 245 against its issue price of Rs 169 per share.
The IPO was subscribed 64.07 times on November 24, the final day of bidding, with bids coming in for 136.1 crore shares against 2.12 crore shares on the block. Qualified institutional buyers booked 129 times their quota of shares, retail investors booked 28.95 times, and high net-worth individuals 62.2. times.
Gandhar is among the top two white oil players and the only Indian player to rank among the top five players globally by revenue. With white oil expected to be the fastest-growing segment, given the favourable outlook for end-use industries, Gandhar Oil’s comprehensive and diversified product portfolio and service offerings will enable the company to insulate its revenue growth, said Prathamesh Masdekar, research analyst at StoxBox.
He believes the issue will be fairly valued at a P/E of 7.1x on the upper price band based on the FY23 earnings and advise investors who have received allotment to hold their shares with a medium-to-long-term perspective.
In the grey market, the IPO shares were trading at a 44 percent premium over the upper price band, analysts on anonymity said. It is an unofficial platform where the IPO shares can be bought and sold till they are listed.
The IPO comprised a fresh issue of Rs 302 crore shares by the company, and an offer-for-sale of Rs 198.69 crore by promoter and investors. The price band for the offer was set at Rs 160-169.
Rajan Shinde, research analyst at Mehta Equities, looks forward to a healthy listing gain of 30-40 percent over the issue price. “We think the company has created a niche place in white oil and serving diversified industrial users which gives this company an edge against its peers in the segment. We recommend allotted investors to book listing day profits over and above our expectations,” he said.
The white oil maker intends to use the issue proceeds to address working capital requirements, repayment of debt availed of by Texol, and expansion of capacity at the Silvassa & Taloja plants.