The initial public offering of PKH Ventures got a muted response from investors, as the offer was subscribed 6 percent after bids were received for 15.59 lakh equity shares against an IPO size of 2.56 crore by the afternoon on June 30, the first day of the bidding.
Retail investors and high networth individuals had bought 13 percent and 10 percent of the shares set aside for them. Up to 15 percent of the IPO is reserved for HNIs and 35 percent for retail.
Qualified institutional investors, who have 50 percent reservation, are yet to show their interest in the offer, which is the fourth IPO to hit the market in 10 days.
The construction and development company, which did not have any anchor portion, is looking to raise Rs 379.35 crore. The price band for the offer is Rs 140-148 a share.
The IPO comprises a fresh issue of 1.82 crore equity shares and an offer for sale of 73.73 lakh shares by promoter Pravin Kumar Agarwal. The fresh issue is expected to fetch Rs 270.22 crore at the upper price band and OFS Rs 109.13 crore.
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The Mumbai-based real estate developer will utilise the fresh issue proceeds for investment in its subsidiary, Halaipani Hydro Project, which will undertake a power project worth Rs 124.11 crore.
The funds will also be invested in another subsidiary, Garuda Construction, to meet long-term working capital requirements of Rs 80 crore and Rs 40 crore will be deployed for acquisitions and other strategic initiatives.
Also read: PKH Ventures IPO opens today: 10 things to know before you buy it
"The company is poised for growth in the coming years led by multiple projects in the pipeline," Reliance Securities said.
It has received three government hotel development projects, while Garuda Construction is building six residential projects.
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PKH also has multiple in-house projects in the pipeline, including real estate development in Punjab, a food park in Rajasthan, cold storage park/ facilities in Madhya Pradesh and a wellness center & resort at Chiplun, Maharashtra, the draft documents said.
It also has two government projects — a 16 MW hydropower plant in Arunachal Pradesh and 42.42 acre entertainment centre in Nagpur.
Considering the healthy business prospects, decent financials, expertise in the hospitality vertical, synergies led by acquisition of Amar Remedies and experienced management, Reliance Securities recommended subscribing the issue.
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