Gandhar Oil Refinery IPO: The IPO of Gandhar Oil Refinery (India) Ltd, which opened for public subscription on Wednesday, received an overwhelming response on the first day of the offering. Till the close of bids on Wednesday, the Rs 500 crore IPO received subscriptions 5.52 times, receiving bids for 11,72,85,168 shares against 2,12,43,940 shares on offer.
The non-institutional investors section was subscribed 7.70 times, while the Retail Individual Investors (RIIs) category was subscribed 6.89 times. The qualified institutional buyers (QIBs) quota received 1.35 times the subscription.
The IPO was oversubscribed within hours of the IPO opening on Wednesday, November 22. The offer remains available until November 24.
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The non-institutional investor category was subscribed 1.53 times, while the private individual investors (RIIs) portion was subscribed 1.77 times. The qualified institutional buyers (QIBs) quota received bids for only 5,016 shares.
The company has raised a little over Rs 150 crore from major investors a day before its first share sale.
The IPO allotment will take place on November 30, while the listing of the shares may take place on December 5.
Gandhar Oil Refinery IPO GMP
According to market observers, unlisted shares of Gandhar Oil Refinery (India) Ltd were trading Rs 70 higher in the gray market compared to the issue price. The gray market premium of Rs 70 or GMP means that the gray market expects a listing gain of 41.42 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 requirements .
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.
(The story and headline have been updated with the latest subscription and GMP data)