Polycab India IPO oversubscribed 52 times on good response from institutional investors

The initial public offer of wires and cables manufacturer Polycab India has received an overwhelming response from institutional investors on April 9, the last day for the subscription.

The Rs 1,345-crore issue has oversubscribed 52 times, as per data available on exchanges. The IPO received bids for 91.59 crore equity shares against the issue size of 1.76 crore shares (excluding anchor investors’ portion).

The portion set aside for qualified institutional buyers (QIBs) oversubscribed 92 times and non-institutional investors’ segment 110 times while retail investors’ category has seen subscription of over 4 times.

The initial public offer comprises a fresh issue of shares worth up to Rs 400 crore and offers for sale of up to 17,582,000 equity shares by the investor as well as promoter selling shareholders.

Polycab India, on April 4, had raised Rs 401 crore from anchor investors.

The issue was opened for subscription on April 5, with a price band at Rs 533-538 per share.

At the upper end of the price band, Polycab IPO is valued at a price to equity (P/E) of 16x its 9MFY19 annualised earnings per share (EPS), that is cheap as compared to listed peers like Havells, Bajaj Electricals and KEI Industries, Ajcon Global said.

Prabhudas Lilladher recommended subscribe rating to Polycab given 1) leadership with most versatile product range in cables and wires 2) strong distribution with 2800 distributors and over 0.1 million retail touch points 3) strong manufacturing base 4) diversification into premium FMEG segment with presence in fans, lighting, switchgears & switches and 5) likely reduction in working capital due to channel financing.

Kotak Mahindra Capital Company, Axis Capital, Citigroup Global Markets India, Edelweiss Financial Services, IIFL Holdings, YES Securities (India) are book running lead managers to the issue.

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