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ICICI Securities and Midhani both became the talk of the town with their debut on the exchange boards. Both were listed at a hefty discount from their issue price today. ICICI Securities was listed at Rs. 435 on NSE at a discount of 16.35% on the issue price of Rs. 520 and on BSE at the discount of 17.10% the listed price was Rs. 431.10.
The stock started off on a negative note. The stock hit 52 week low on BSE & NSE at Rs. 431.10 and Rs. 435 respectively. The IPO had received poor response from the investors and the trend will seem to continue for a little longer until the stock is perceived to be a profitable one.
The Offer for Sale was Rs. 401.7 crore which received 78% subscription. The Qualified Institutional Buyer segment of the issue was fully subscribed. The Retail investors and Non-institutional Investors were subscribed by 88% and 33% respectively.
ICICI Securities had witnessed poor response in the share sale from March 22-26 which made the company reduce the issue size to Rs. 3500 crore out of which Rs. 1717 crore was raise from the anchor investors. Prior to the primary offering analysts had cautioned the investors regarding the higher valuation of the issue.
ICICI Securities renders online brokering services to its customers. Apart from Brokering it has also diversified into distribution and investment the revenue from which accounts for 37.4% of the total revenue in FY17. But the higher dependency of the company on brokerage income tends to be a risk factor. But if the past performance is taken into consideration ICICI Securities has been the largest equity broker in the country since FY14.
MIDHANI (Mishra Dhatu Nigam) IPO unlike the ICICI Securities had received an encouraging response from the investors. The IPO was oversubscribed by 1.21 times. Open from March 21-23 the primary offering received bids for 5, 90, 66, 850 shares against the issue size of 4, 87, 08,400 shares, the IPO was Rs. 438 crore issue. The price band of the issue was Rs. 87-90.
Even with the IPO being oversubscribed the scrip got listed at a discount of 3.33% at Rs. 87 from the upper price band of Rs. 90. The stock could not cope up, as the stock price fell down by 4.4% and hit the day’s low on BSE at Rs. 86.05. It also hit 52week low at Rs. 87 on NSE.
MIDHANI has registered average EBITDA margin and ROE (Return on Equity) at 22% and 20% respectively. The debt to equity ratio is 0.1x with cash and cash equivalents available at Rs. 261 crore. The revenue and PAT CAGR over FY15-17 has been 9% and 10% respectively.
MIDHANI being incorporated in 1973 is state owned manufacturer of steel, super alloys and titanium alloys. The features of the products manufactured cater the needs of the defense, auto and space sectors. The IPO was a part of the disinvestment plan being carried out by the government diluting 26% of its holdings in the company. The proceeds from the company shall be wholly given to the government.
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