The public issue of Craftsman Automation has seen a subscription of 55 percent so far on day 1 as it received bids for 21.31 lakh equity shares against the offer size of 38.69 lakh equity shares.
The subscription data available on exchanges showed that the retail investors remained at the forefront to support the issue as the reserved portion was subscribed 1.06 times and that of non-institutional investors was subscribed 9 percent. But qualified institutional buyers have not started putting in bids for the offer.
Craftsman Automation, a diversified engineering company with vertically integrated manufacturing capabilities, plans to sell Rs 823.69 crore through IPO which comprises a fresh issue of Rs 150 crore and the rest by offer for sale. Promoter Srinivasan Ravi, and investors Marina III (Singapore) PTE and International Finance Corporation and K Gomatheswaran will offload their shares through offer for sale route.
Also read: Craftsman Automation IPO | 10 things to know before investing in the issue
The company has set a price band for its offer at Rs 1,488-1,490 per share.
"At the upper price band, Craftsman is available at a PE of 46.6x (annualized basis on FY21E EPS of 31.9), which is aggressively priced. Government's 'Make in India' initiative and other regulatory and policy supports along with well-established relationship with domestic and global OEMs are positives for the company," said Geojit Financial Services.
The brokerage assigned a subscribe rating for the issue, with a long-term perspective, on the back of healthy growth in the OEM segment due to lower base and reduction in debt.
Also read - Craftsman Automation IPO opens today: Should you subscribe?
The IPO Watch data indicated that Craftsman Automation is available at a premium of around 11 percent (Rs 160-170 per share) over issue price of Rs 1,490, in the grey market.
The company, which is engaged in three business segments, namely powertrain and other products for the automotive segment, aluminium products for the automotive segment, and industrial and engineering products segment, will utilise net fresh issue proceeds for repayment of outstanding debts.