Gandhar Oil Refinery IPO: The IPO of Gandhar Oil Refinery (India) Ltd continues to receive a strong response from investors, with the offer receiving over 15 subscriptions on the second day of bidding on Thursday. Now, till 10.40 am on the last day of bidding on Friday, the Rs 500 crore IPO has been subscribed a whopping 17.96 times, receiving bids for 38,16,22,296 shares against 2,12,43,940 shares on offer.
The non-institutional investors section was subscribed 32.56 times, while the Retail Individual Investors (RIIs) category was subscribed 19.78 times. The qualified institutional buyers (QIBs) quota received 3.37 times the subscription.
The IPO was oversubscribed within hours of its opening on Wednesday, November 22. The offer will remain available until the end of market hours on Friday, November 24.
The IPO allotment is likely to take place on November 30, while the listing could take place on December 5.
Gandhar Oil Refinery IPO GMP
According to market observers, unlisted shares of Gandhar Oil Refinery (India) Ltd continue to trade Rs 76 higher in the gray market compared to the issue price. The gray market premium of Rs 76 or GMP means that the gray market expects a listing gain of 44.97 percent from the public issue. The GMP is based on market sentiment and continues to change.
The ‘gray market premium’ indicates that investors are willing to pay more than the issue price.
The price band of the IPO has been set at Rs 160-169 per share.
Gandhar Oil Refinery IPO: Should You Subscribe?
Brokerage Swastika Investmart recommended ‘Subscribe’ and said: “The issue appears reasonably priced, with a price-to-earnings ratio of 7.10x. So taking into account all these factors, we assign a tender rating to this IPO.”
Gandhar Oil Refinery is launching its IPO after abandoning plans to do so in 2017.
Similarly, BP Wealth analysts said: “The issue is fairly valued. We recommend a ‘SUBSCRIBE’ rating for this issue.”
According to the report, Gandhar Oil Refinery was the largest manufacturer of white oils in India by revenue in FY23, including domestic and foreign sales, and one of the top five players globally in terms of market share in CY22.
Gandhar Oil Refinery IPO Details: Price, Lot Size
The IPO involves a fresh issue of shares worth Rs 302 crore and an Offer for Sale (OFS) of 1.17 crore shares by promoters and existing shareholders.
Those offering shares in the OFS include promoters – Ramesh Babulal Parekh, Kailash Parekh and Gulab Parekh – and other shareholders, Fleet Line Shipping Services LLC, Denver Bldg Mat & Dcor TR LLC and Green Desert Real Estate Brokers.
The first public issue, with a price band of Rs 160-169 per share, will open for subscription on November 22 and close on November 24. The company will fetch up to Rs 500.69 crore at the higher end of the price range.
The minimum lot size for an application is 88 shares. The minimum investment amount required by retail investors is Rs 14,872. The minimum investment for lot size for NII is 14 lots (1,232 shares) which works out to Rs 2,08,208 and for NII it is 68 lots (5,984 shares) which works out to Rs 1,011,296.
Proceeds from the new issuance component will be used for debt payments and for the purchase of equipment and civil works necessary for the expansion of automotive oil capacity at the Silvassa plant.
In addition, the funds will be used to expand the capacity of Vaseline and its associated cosmetic product division at the company’s Taloja plant, as well as expand the capacity of white oils by installing mixing tanks at the plant and financing working capital needs .
Gandhar Oil Refinery is a leading manufacturer of white oils with a growing focus on the consumer and healthcare end industries. Nuvama Wealth Management (formerly known as Edelweiss Securities) and ICICI Securities are the lead managers of the IPO.