Thursday, September 16, 2010

Electrosteel Integrated IPO - Analysis, Recommendation, Subscription, Allotment, Listing

Analysis:
ElectroSteel Integrated, a part of Electrosteel Group, is coming up with an IPO of 22,55,16,188 equity shares of Rs 10 each. There will also be a Green Shoe Option of up to 3,38,27,428 equity shares.

The company is promoted by ElectroSteel Casting which is in the business of manufacturing cast iron pipes for over four decades and ductile iron spun pipes since the last 15 years.

The issue will open on September 21 and will close for subscription on September 24. The company has decided a price band of Rs 10-11.

The company intends to use issue proceeds for setting up a 2.2 MTPA integrated steel and ductile iron spun pipes project in Jharkhand, India. The company also intend to use the IPO proceeds for margin money towards bank guarantees. It has acquired approximately 1,723.44 acres of land for the proposed plant, taking into account the scope for future expansion.

The book running lead managers to the issue are Edelweiss Capital Limited, Enam Securities Private Limited and SBI Capital Markets Limited. Karvy Computershare Private Limited is the registrar.

Recommendation:
CARE has assigned Grade 3 to the IPO. We would recommend other IPOs if you have limited funds available. If you have funds surplus, then you could look at this IPO as well especially for listing gains.

Subscription:
The IPO has got 8.14 times subscribed at the close. At the close of the IPO,
QII segment got subscribed by 5.86 times
NII segment got subscribed by 28.58 times
Retail segment got subscribed by 6.19 times

Allotment:
Click here to check if you have been alloted Electrosteel Integrated shares!

Listing:
Electrosteel Integrated listed on 8th October and closed the day at a modest 3.6% premium against the issue price of Rs 11. The share closed at Rs 11.40 after witnessing an intraday high of Rs 11.85 and low of Rs 9.35.


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