Nelcast IPO subscribed 7.36 times

Good response received by the issue of Nelcast, a castings and component manufacturing company, which entered capital market with a 43.50 lakh share initial public offering, IPO.

Qualified institutional investors have supported well to the issue, their reserved portion of 21.75 lakh shares received more than 2.44 crore bids, subscribed over 11 times. Retail also helped the issue with 4.6 times subscription while non institutional investors portion did not subscribe fully. 

In total, public issue received 3.2 crore bids, which includes 64.2 lakh bids at cut off price.

The issue oversubscribed 7.36 times, as per NSE website.

Subscription Details

The issue made through 100% book building process, with the price band between Rs 195 and Rs 219 for the shares of face value Rs 10 each.

The issue constitutes 25% of the post-issue paid-up capital. The company plans to raise up to Rs 95.27 crore by way of fresh equity.

Nelcast caters mainly to commercial vehicle and tractor industries. It plans to use the issue proceeds for expansion and modernisation of its units at Gudur in Andhra Pradesh and Ponneri in Tamil Nadu, to reach a production capacity of 1,50,000 MT per annum by 2008-09.

Its customer base includes Tata Motors, Ashok Leyland, Eicher Motors, Tata Cummins, Mahindra and Mahindra, TAFE, International Tractors and New Holland India. It exports to the US, Europe and Australia, its client list comprising Arvin Meritor, Volvo, SIGMA and Dobbie Dico Meter.

Karvy Investor Services and UTI Securities are the book running lead managers to the issue.