Mahanagar Gas gets oversubscribed by 1.08 times on 1st day
Mahanagar Gas Ltd on its first day of IPO subscription received positive response from the investors.
The IPO was oversubscribed with bagging bids of about 1,88,19,255 shares, which is 1.09 times of the total size of 1,73,46,150 shares.
In the data, Qualified institutional buyers (QIB) recorded bid of around 89,07,395 which 1.82 times from 48,98,900 shares offered. The Non-institutional investors managed to withdraw around 23% of the reserved shares.
On BSE, retail individual investors also surpassed the offered bid by 1.09 time from 85,73,075 to 93,09,895.
From the 2 lakh shares kept reserved for the employee, around 2% was recovered of the total shares.
MGL came up with an Initial Public Offering (IPO) of 24.69mn shares through 100% book building process. TheThe price band for the issue has been fixed at Rs380 to Rs421. The promoters of the company Gail India and BG Asia Pacific Holdings (BGAPH) will sell up to 1.23 crore shares each. The Offer will constitute 25% of the post offer paid-up equity capital MGL. The IPO will be continued from June 21 - June 23, 2016.
As per the Issue details, QIB consist of 50% of issue shares, while that of non-institutional shares around 15%. Retail and minimum lot size is both 35%.
The IPO is expected to perform well, as according to analyst it is fairly valued.
According to ICICI Securities: MGL has strong city gas distribution (CGD) network which offers good demand potential due to lower CNG and residential PNG penetration and increased usage of gas for industrial volumes. The strong financial position provides MGL with financial flexibility to expand its network in its existing markets and enter new markets. The proposed issue price band of Rs. 380-421 implies a P/E of 11-12.2x (12.1-13.5x on diluted basis) on FY16 earnings, which is at a discount to its benchmark peers. “We recommend that investors subscribe to the IPO,” they said.