The IPO was subscribed merely 11 per cent at the end of day one. At 5:00 pm, only 1,13,93,298 shares of the company received bids out of a total issue of 10,71,05,262 suggesting that the IPO’s rich valuations are proving a deterrent.
At a price band of Rs 285-291, the company’s IPO is roughly valued at 76 times one-year forward earnings, making it one of the most expensive issues to hit the primary market in recent times.
Analysts said Sona BLW is a play on the EV (electric vehicle) theme. They said while the IPO valuation appears rich, the auto component maker is a consistent performer, with industry-leading margins, return on equity (ROE) and return on capital employed (ROCE).
Most analysts gave “subscribe” recommendations to their clients on the IPO.
On Friday, the company said that it had raised Rs 2,500 crore from its anchor allotment process with as many as 42 institutional investors subscribing to the pre-IPO issue.
The issue comprises up to Rs 300 crore worth of fresh equity and Rs 5,250 crore worth of shares on offer for sale by Singapore VII Topco III Pte, an affiliate of Blackstone.
Sona BLW intends to utilise the proceeds from the fresh issue to repay Rs 241 crore of its identified borrowings. It will spend the rest for general corporate purposes.
