Shares of Interarch Building Products will make their Dalal Street debut on today, that is, on Monday, August. The company is headed for a health listing pop, if one goes by the signals from the grey market premium (GMP) for the issue, which has remained strong through the IPO buzz.
Ahead of its listing at the bourses, Interarch Building Products was commanding a grey market premium (GMP) of Rs 340-350 per share, suggesting a listing pop of around 40 per cent. However, the premium in the unofficial market stood at close to Rs 370, when the issue had closed for the bidding.
Prashanth Tapse, Senior Vice President- Research at Mehta Equities believes the investor demand has come considering reasonable valuations and an opportunity to invest in a leading player in the PEB segment. Considering the subscription status and market sentiments, it is indicating a healthy room for listing gain in the range of 25-30 per cent above the issue price, he said.
"We continue to recommend allotted investors to hold as Interarch is well-positioned for sustained growth for the long term. The issue was reasonably priced by looking at its financial performance and market position and we believe the market could give Interarch a premium multiple towards its leadership position and sector agnostic demand and growth triggers," Tapse adds.
The IPO of Interarch Building Products ran for subscription between August 19 and August 21. The construction solutions player had offered its shares in the fixed price band of Rs 850-900 apiece with a lot size of 16 shares. The company raised a total of Rs 600.29 crore from its IPO, including a fresh share sale of up to Rs 200 rore and an OFS of up to 44,47,630 shares.
The issue was overall subscribed a total of 93.53 times. The portion for qualified institutional bidders (QIBs) was booked 205.41 times. The quota for non-institutional investors was subscribed 128.42 times. The allocations reserved for retail investors and employees saw bidding for 19.11 times and 24.19 times during the bidding process.
"We expect the issue to list at a premium of 37 per cent on the back of robust demand it has garnered amongst the participants," said Akriti Mehrotra, Research Analyst at StoxBox. "We advise the participants who have been allotted with the share to hold it from a medium to long term perspective," she said.
Incorporated in 1983, Interarch Building Products is a leading provider of turnkey pre-engineered steel construction solutions in India. The company offers integrated facilities for design, engineering, manufacturing, and on-site project management for the installation and erection of pre-engineered steel buildings (PEB).
Brokerages were mostly positive on the issue suggesting investors to subscribe to it for a long term. Ambit and Axis Capital were the book running lead managers of the Interarch Building Products IPO, while Link Intime India served as the registrar for the issue.