Gandhar Oil Refinery IPO: The initial public offering of Gandhar Oil Refinery (India) Ltd, which opened for public subscription on Wednesday, received an overwhelming response on the first day of bidding. Till the end of bidding on Wednesday, the Rs 500-crore IPO got 5.52 times subscription, receiving bids for 11,72,85,168 shares as against 2,12,43,940 shares on offer.
The portion for non-institutional investors got subscribed 7.70 times while the category for Retail Individual Investors (RIIs) attracted 6.89 times subscription. The quota for Qualified Institutional Buyers (QIBs) received 1.35 times subscription.
The IPO was oversubscribed within hours of IPO opening on Wednesday, November 22. The offer will remain available till November 24.
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The category for non-institutional investors was subscribed 1.53 times, while the portion for retail individual investors (RIIs) received 1.77 times subscription. The quota for qualified institutional buyers (QIBs) received bids for just 5,016 shares.
The company has raised a little over Rs 150 crore from anchor investors a day before its initial share-sale offering.
The IPO allotment will take place on November 30, while the share listing might take place on December 5.
Gandhar Oil Refinery IPO GMP
According to market observers, unlisted shares of Gandhar Oil Refinery (India) Ltd were trading Rs 70 higher in the grey market as compared with its issue price. The Rs 70 grey market premium or GMP means the grey market is expecting a 41.42 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
The price band of the IPO has been fixed at Rs 160-169 per share.
Gandhar Oil Refinery IPO: Should You Subscribe?
Giving the ‘Subscribe’ recommendation, brokerage Swastika Investmart said, “The issue appears to be fairly priced, with a P/E ratio of 7.10x. So considering all these factors, we assign a subscribe rating to this IPO.”
Gandhar Oil Refinery is launching its IPO after abandoning plans to do so in 2017.
Similarly, analysts at BP Wealth said, “The issue is fairly valued. We recommend a ‘SUBSCRIBE’ rating for the issue.”
It said Gandhar Oil Refinery was India’s largest manufacturer of white oils by revenue in FY23, including domestic and overseas sales, and was one of the top five players globally in terms of market share in CY22.
Gandhar Oil Refinery IPO Details: Price, Lot Size
The IPO comprises a fresh issue of equity shares worth Rs 302 crore and an Offer for Sale (OFS) of 1.17 crore shares by promoters and existing shareholders.
Those offering shares in the OFS include promoters — Ramesh Babulal Parekh, Kailash Parekh, and Gulab Parekh — and other shareholders, Fleet Line Shipping Services LLC, Denver Bldg Mat & Dcor TR LLC, and Green Desert Real Estate Brokers.
The maiden public issue, with a price band of Rs 160-169 per share, will open for subscription on November 22 and end on November 24. The company will fetch up to Rs 500.69 crore at the upper end of the price band.
The minimum lot size for an application is 88 shares. The minimum amount of investment required by retail investors is Rs 14,872. The minimum lot size investment for NII is 14 lots (1,232 shares), amounting to Rs 2,08,208, and for NII, it is 68 lots (5,984 shares), amounting to Rs 1,011,296.
The proceeds from the fresh issue component will be used for payment of debt and for the purchase of equipment and civil work required for expansion in the capacity of automotive oil at the Silvassa plant.
In addition, the funds will be utilised for expansion in capacity of petroleum jelly and accompanying cosmetic product division at the company’s Taloja plant as well as expansion in capacity of white oils by installing blending tanks at the plant and funding working capital requirements.
Gandhar Oil Refinery is a leading manufacturer of white oils with a growing focus on the consumer and healthcare end industries. Nuvama Wealth Management (formerly known as Edelweiss Securities) and ICICI Securities are the book-running lead managers to the IPO.
(The story and the headline has been updated with the latest subscription and GMP data)
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