Windlas Biotech IPO, Exxaro Tiles IPO Details, Subscription, GMP: Should you Invest?

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Windlas Biotech limited opened its initial public offering (IPO) on Wednesday and will close subscriptions on August 6, 2021. The public issue for this pharmaceutical manufacturer was successfully subscribed 3.17 times by investors on the first day of bidding. The company received bids for 1.94 crore equity shares against an issue size of 61.36 lakh equity shares as per the exchange date. The offer size was reduced to 61.36 lakh shares from the earlier 87.29 lakh shares as a result of the anchor investment that Windlas Biotech managed to raise.

The company managed to raise Rs 120.46 crore from anchor investors on August 3, a day before the IPO made its debut in the market. The portion set aside for retail investors saw the biggest subscription out of all the investor categories. The retail segment subscribed to the issue a total of 6.15 times. The qualified institutional buyers (QIBs) had subscribed to the issue 0.00 times against their reserved portion. The non-institutional investors had subscribed to the IPO a total of 0.34 times against their allotted portion.

In terms of the reserved portion for the respective investor groups. The QIBs had the highest reserved portion that stood at 50 per cent. The NII category was given an allocation of 15 per cent for the issue and the retail segment had a 15 per cent reservation.

The grey market premium for the issue stood at Rs 130 as per information on IPO Watch. This indicated that the shares were trading at a premium of Rs 578 to 590 per equity share on the unlisted grey market.

The Windlas Biotech IPO has an issue size of Rs 401.54 crore. It comprises of a fresh issue worth 165 crore and an offer for sale (OFS) of Rs 236.54 crore with 5,142,067 equity shares with a face value of Rs 5 per share. The price band for the issue was listed as Rs 448 to Rs 460 per equity share.

Speaking on the outlook of the Windlas Biotech IPO, Ashish Chaturmohta, director of research at Sanctum Wealth Management said, “Windlas is amongst the top five players in the domestic pharmaceutical formulations contract development and manufacturing organization (CDMO) industry in India in terms of revenue. Having over two decades of experience, Windlas is providing a comprehensive range of CDMO services ranging from product discovery, product development, licensing and commercial manufacturing of generic products, including complex generics, in compliance with current Good Manufacturing Practices with a focus on improved safety, efficacy and cost. The company is priced at FY21 P/E of 26.8x, and it is in line with the peer valuation.”

Exxaro Tiles IPO

The tile manufacturer, Exxaro Tiles, saw its IPO make a debut on August 4, and will close the subscriptions on August 6. The IPO was successfully subscribed a total of 4.67 times on day one of the public offerings. The issue had received bids for 5.35 crore equity shares against an IPO size of 1.14 crore equity shares, according to the subscription date on the exchange. The offer size for Exxaro Tiles IPO was also reduced after it raised Rs 23.68 crore from anchor investors, prior to the opening of the issue. The size went down from 1.34 crore shares to 1.14 crore equity shares.

The retail category once again took the lead with a subscription of 9.29 times against their reserved portion. The QIBs and the NIIs had subscribed to the issue a total of 1.11 times and 0.65 times respectively. The employees also subscribed to the issue with a subscription of 0.74 times against their allotment.

The reserved portion for the QIBs for the Exxaro Tiles IPO was 25 per cent. The NII category had an allotment of 35 per cent and the retail segment had a 40 per cent allocation.

The GMP for the issue stood at Rs 20, this indicated that the shares were trading at a premium of Rs 138 to Rs 140 on the unlisted market.

Exxaro Tiles has an issue size of Rs 161.09 crore with a fresh issue of Rs 134.23 crore. It is also made up of an OFS worth Rs 26.86 crore with 2,238,000 equity shares with a face value of Rs 10 per equity share. The price band for the issue stands at Rs 118 to Rs 120 per equity share.

“Exxaro Tiles is engaged in the manufacturing and marketing of vitrified tiles used majorly for flooring solutions. The company has two manufacturing facilities one each at Vadodara and Talod spread over 1.5 lakh square meters. Its business operations are broadly divided into two product categories – double charge vitrified tiles, and glazed vitrified. In FY21, the company reported a 6% rise in sales to Rs 255 crore. Net profit jumped 36% to Rs 15.2 crore during the year. The company said it has the highest operating margins before depreciation and amortisation (EBITDA margin) of 19% among peers. That said, its return on equity at 11.9% is lower than Kajaria’s 16.5% Exxaro’s total borrowings at the end of FY21 were Rs 161 crore,” said Ashish Chaturmohta.

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