Thursday, September 23, 2010

Bedmutha Industries IPO - Analysis, Recommendation, Subscription, Allotment, Listing

Analysis:
Bedmutha Industries Ltd, one of the leading steel wire manufacturers in western India located in Nashik, has come out with a 100% book built issue IPO of 9,000,000 equity shares of Rs 10. The issue size range is Rs 85.5 - 91.8 crore.

Bedmutha operate four manufacturing units in and around Nashik and they are strategically located in proximity to the source of raw materials and markets ensuring cost savings and logistic benefits. Bedmutha have promoted Kamalasha Infrastructure & Engineering Private Limited (KIEPL) which is their subsidiary, for implementation of turnkey contracts for infrastructure namely in power, roads, railways etc.

The issue will open on September 28 and will close on October 1, 2010. The company has fixed the price range at Rs 95-102 per equity share.

The objective of the Issue is to finance setting up of new plant at Sinnar, Nashik for manufacturing of new product Low Relaxation Pre-Stress Concrete (LRPC) Wire and Spring Steel Wire; General Corporate Purposes; and Issue Expenses.

The market lot and minimum order quantity is 65 shares. The shares will be listed on BSE and NSE.

The book running lead managers are Ashika Capital Ltd and Keynote Corporate Services Ltd. The registrar of the issue Mondkar Computer Private Limited.

Recommendation:
ICRA has assigned Grade 2 to the Bedmutha IPO. We would not recommend this IPO to investors. There have been frentic activity on IPOs lately and it is time to take a breather. In the month of september, there were lot of good issues and they received great subscription. We would let this IPO pass. Indosolar did not have great listing. Investors lost 20% on the first day itself so time to be cautious.

Subscription:
At the close of the IPO, the IPO has got subscribed 7.4 times.
QII segment got subscribed 0.67 times
NII segment got subscribed 29.19 times
Retail segment got subscribed 8.51 times

Allotment:
The company has fixed the issue price at Rs 102. Click here to check if you have been alloted Bedmutha Industries shares!

Listing:
Bedmutha Industries IPO got listed on 14th October. The share closed at Rs 192.90, with a premium of 89.12% over issue price of Rs 102 a share. The stock has touched an intraday high of Rs 204 and low of Rs 98 on NSE. Finally some cheer for investors!


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