Shreeji Shipping Global IPO subscribed 2x on Day 1, GMP signals decent listing; should you apply?

Shreeji Shipping Global

The initial public offering of Shreeji Shipping Global was subscribed more than two times its offer size on the first day of public bidding (August 19). The grey market estimates signal a decent listing for the Gujarat-based shipping and logistic solution company.

The Rs 411-crore IPO received bids for nearly 2.43 crore shares, as against the offer size of 1.14 crore shares, according to data on NSE. Non Institutional Investors (NII) booked their reserved portion over 3 times, while Retail Individual Investors (RII) subscribed the portion kept for them over 2 times. Qualified Institutional Buyers (QIBs) have fully subscribed the portion kept for them.

Key things to know about Shreeji Shipping Global IPO:

Shreeji Shipping Global launched its maiden public issue to raise Rs 411 crore through an entirely fresh issue of shares at a price band of Rs 240-252 per share. The IPO will remain open for public bidding between August 19 and August 21.

Investors can bid for a minimum of 58 shares, requiring an investment of Rs 14,616 at the upper price band, and in multiples thereafter. The allotments will likely be finalized by August 22, and the shares are scheduled to debut on stock markets on August 26.

Shreeji Shipping Global IPO GMP:

Ahead of listing, the unlisted shares of the company were trading with a grey market premium (GMP) of nearly 12 percent over the IPO price at Rs 282 apiece, according to data on Investorgain. This is higher than the 10 percent GMP cited by the site last week.

According to IPO Watch, the unlisted shares of the company were trading with 11.5 percent GMP over the IPO price in the grey market.

Should you apply?

Investors looking for long-term opportunities may consider investing in the IPO, said Master Capital Services. "Shreeji Shipping Global Ltd is a key shipping and logistic service provider in India and plans to focus on the expansion of business operations from land to port to capitalize on industry opportunities. The company also intends to continue its focus on cost optimization and improving operational efficiency through expansion of value-added services and offering services that enhance customer experience, improve overall asset utilization through economies of scale, and increase the level of integration across logistics networks," it said.

Shreeji offers investors a high-ROCE, moderately geared logistics play, where execution on asset turns and contract stickiness will determine whether earnings can compound consistently through the shipping cycle, said Harshal Dasani Business Head, INVasset PMS.

A day before the IPO opened for public bidding, Shreeji Shipping Global raised Rs 123.2 crore from 14 anchor investors including Morgan Stanley, BNP Paribas, and Bank of India Mutual Fund, on August 18. Aarth AIF Growth Fund, Viney Growth Fund, Sunrise Investment Trust, Golden Equity Fund, SB Opportunities Fund, Invicta Continuum Fund, and Finavenue Capital Trust also invested in the company via anchor book.

Shreeji Shipping Global, the flagship company of Jamnagar-based Shreeji Group, provides shipping and logistic solution for dry bulk cargo at various ports and jetties at India and Sri Lanka. It has fleet of more than 80 vessels (consisting of barges, mini bulk carriers, tug boats and floating cranes) and more than 370 earthmoving equipment.

The company intends to spend Rs 251.2 crore of IPO proceeds for acquisition of dry bulk carriers in Supramax category in the secondary market. Further, Rs 23 crore will be utilized for repaying debt, and the remainder funds will be set aside for general corporate purposes.

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