Mandhana Industries buys stake in Servalakshmi

Mandhana Industries has bought stake in the recently listed Servalakshmi Papers. They bought 18 lakh shares at Rs 42. According to Varinder Bansal of CNBC-TV18, this is a huge premium that they have paid at Rs 42, since Servalakshmi shares today trade at Rs 18 levels.

Another major cue for the stock was that their book-running lead manager (BRLM) actually sold on the first day of listing of the paper company. Indian Overseas Bank, which was allotted around 10.3 lakh shares as co-BRLM for Servalakshmi, dumped 3.5 lakh shares at Rs 29.60. Total debt of Servalakshmi is nearly Rs 260 crore and IOB has lent nearly Rs 114 crore to the company, Bansal says.

Also read: The IPO story of Servalakshmi

IOB is not alone in this. India Focus Cardinal sold their entire chunk of 13.7 lakh shares at Rs 28.45 and Fortune Capital sold 6.77 lakh shares of Servalakshmi at Rs 41.54. An individual also dumped a huge chunk of shares of the company on the very first of trading of Servalakshmi, Bansal reports.

Servalakshmi listed yesterday at Rs 29. It zoomed to breach Rs 49 levels and then, almost immediately corrected by 40%. The stock today trades at Rs18 levels.

As for Mandhana, the stock is down nearly 15%-16% today. The lock-in period of 42 lakh shares for the pre-IPO investors ended yesterday. The pre-IPO placement of Mandhana was done at a price of Rs 150 and a bonus was later given. According to Bansal, the effective acquisition price for the pre-IPO investors comes to be around Rs 75 per share. The stock now trading at Rs 190 offers a great opportunity for the investors to book profits, he says.