Magnet winding wires manufacturer KSH International has reduced the size of its IPO to Rs 644.4 crore from Rs 710 crore earlier to achieve the minimum 90 percent subscription threshold, as per the final prospectus filed with the exchanges last week. Hence, the company is set to make its market debut as scheduled on December 23.
The company launched its maiden public issue on December 16 and closed on December 18 with an 83 percent overall subscription, with the portion reserved for qualified institutional buyers (QIBs) being fully subscribed. The portions set aside for non-institutional investors and retail investors were subscribed 42 percent and 86 percent, respectively.
SEBI has provided certain options for the company to ensure that the issue is subscribed at least 90 percent. These include reducing the offer-for-sale (OFS) size, extending the issue subscription period, or lowering the price band. If the company fails to execute any of these measures, the IPO must be cancelled and the entire amount refunded to investors.
KSH has opted for the first option and reduced its offer-for-sale size to Rs 224.4 crore from Rs 290 crore earlier, while keeping the fresh issue size intact at Rs 420 crore. As a result, the IPO subscription crossed the 90 percent threshold.
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With the revised offer size, the IPO comprises a fresh issue of shares worth Rs 420 crore and an offer-for-sale of Rs 224.4 crore by promoters, priced at the upper end of the price band of Rs 365–384 per share.
On December 15, a day before the IPO opened for public subscription, KSH International raised Rs 213 crore from 10 anchor investors at Rs 384 per share.
The Pune-based company will utilise Rs 226 crore from the net fresh issue proceeds for repayment of debt, Rs 87 crore for the purchase and installation of new machinery for expansion at the Supa facility and Unit 2 in Chakan, and Rs 8.8 crore for the purchase and installation of a rooftop solar power plant for power generation at the Supa facility.
The remaining funds, up to Rs 76.9 crore, will be used for general corporate purposes.
KSH International claims to be the third-largest manufacturer and the largest exporter of magnet winding wires in India. Its products are used in transformers, motors, alternators, and generators, which are deployed across end-use industries such as power, renewables, industrials, railways, automotive, home appliances, refrigeration, and air conditioning.
Its key customers include Bharat Bijlee, Virginia Transformer Corporation, Bharat Heavy Electricals, Georgia Transformer Corporation, Hitachi Energy India, Siemens Energy India, GE Vernova T&D India, Hind Rectifiers, Transformers and Rectifiers India, Indo-Tech Transformers, TBEA, Atlanta Electricals, Toshiba Transmission & Distribution Systems (India), and CG Power and Industrial Solutions.
Nuvama Wealth Management and ICICI Securities acted as the merchant bankers for the KSH International IPO.
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