Deepak Builders & Engineers IPO subscribed 12x on day 2, retail portion booked 16x

Deepak Builders & Engineers India IPO

Deepak Builders & Engineers India's initial public offering continued to garner robust interest from investors even on the second day of bidding, i.e. October 22, with 12.02 times subscription despite subdued market conditions. The issue will close on October 23.

The engineering and construction company intends to raise Rs 260.04 crore through its initial share sale that comprises of fresh issue 1.07 crore equity shares worth Rs 217.21 crore, and an offer-for-sale of 21.1 lakh shares worth Rs 42.83 crore. Promoter Deepak Kumar Singal and his wife Sunita Singal will be selling shareholders in the offer-for-sale. The price band for the issue is Rs 192-203 per share.

Investors have bid for 10.77 crore equity shares so far, against the offer size of 89.67 lakh equity shares, the subscription data on the exchanges showed.

Retail and non-institutional investors continued to lend strong support to the issue, buying 15.96 times and 17.4 times the portions set aside for them, respectively. Qualified institutional buyers also looked supportive to the issue as their reserved portion was fully booked on second day, subscribing 1.08 times.

The issue was subscribed more than 4 times on October 21, the first day of bidding.

The Ludhiana-based company with order book of 1,380.4 crore has already mopped up Rs 78 crore from five anchor investors last week including Saint Capital Fund, Neomile Growth Fund, Elite Capital Fund, Zeal Global Opportunities Fund, and Citadel Capital Fund.

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The company will spend Rs 142 crore out of net fresh issue proceeds (IPO less issue expenses) towards repaying its debt, and working capital requirements. And the remaining amount will be used for general corporate purposes.

With healthy subscription numbers, its shares also seem to be getting good interest in the grey market, as the market observers said shares were available at around 30 percent premium over the upper price band. The grey market is an unofficial market for trading in IPO shares till the listing.

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