Wednesday, September 21, 2011

MandB Switchgears IPO

M and B Switchgears, a Transformer manufacturer, has come out with an IPO of 50 lakh equity shares and plans to raise over Rs 90 crore. The company is engaged in manufacturing distribution, power, furnace and special purpose transformers. Its existing annual production capacity in terms of KVA is 75,000 KVA of transformer per month on single shift basis and the annual aggregate capacity is 9,00,000 KVA per annum. Promoter Shyam Sunder Mundra's stake will be reduced to 27.76% from 37.01% post issue. Promoters' will hold 70.69% stake in the company post issue.

The IPO shall open on 28 September and shall close on 5 October, 2011. The company has fixed the price band of the issue at Rs 180 to Rs 186 per share. The issue price band has been fixed at Rs 180-186 a share. Bids can be made for a minimum of 30 equity shares and in multiples of 30 shares thereafter.

The company intends to use funds for setting up new grid connected 4 MWp solar photovoltaic power plant at Gagorni village, Rajghar district in Madhya Pradesh.

D & A Financial Services Private Limited is the book running lead manager to the issue. Bigshare Services Pvt Ltd is the registrar of the issue.

Recommendation:
ICRA has assigned Grade 2 to the IPO. We think this IPO is expensive at current levels and would not recommend it to investors.

Subscription:
M and B Switchgears managed to get subscribed 1.4 times.

At the close of the IPO,
QII segment got subscribed by 1.03 times
NII segment got subscribed by 1.56 times
Retail segment got subscribed by 2.35 times

Allotment:
Click here to check M and B IPO Allotment status!

Listing:
M and B Switchgears listed on 19 October 2011. It hit an intra-day high of Rs 356 and an intra-day low of Rs 121 before closing at 318.40, a premium of 71% to the issue price.