Gandhar Oil Refinery IPO continued to receive a robust response from investors. The issue was subscribed to 65.61 times at 5:00 pm on the third day of bidding, November 24, 2023. It has received bids for 136 crore shares against 2.07 crore shares on offer.
Read More:-LIC Stocks Soar 10% To See Best Intraday Gains Since Listing; Here’s Why They Are Rising
The category for qualified institutional buyers (QIBs) was subscribed to the most, 129 times, followed by the portion reserved for non-institutional investors (NII), which saw bids at 64.34 times. Meanwhile, the retail investor’s quota was subscribed to 29.91 times.
GMP: The company’s shares in the grey market are trading at a healthy premium of ₹76, indicating a 45 percent premium at listing.
However, one must note that grey market premium is only an indicator of how the company’s shares are performing in the unlisted market and can change quickly.
Read More: Tata Technologies IPO Day 3: Firm surpasses Reliance, Nykaa with 51 lakh applications
About the IPO
The ₹501 crore IPO of Gandhar Oil opened for subscription on November 22 and will close on November 24. The price band for the offer has been set at ₹160-169 per share. A bidder will be able to apply in lots and one lot of the IPO comprises 88 company shares. Minimum amount required for a retail investor to apply for the IPO is ₹14,872 ( ₹169 x 88).
Gandhar Oil is a manufacturer of white oils that caters to the consumer and healthcare end industries. The company offers an extensive range of over 350 products that primarily fall under three categories – personal care, healthcare and performance oils (PHPO), lubricants, and process and insulating oils (PIO) – under the brand name ‘Divyol’.
Read More: Paytm Shares Tank 5% After 2.5% Shares Change Hands in Block Deal; Details
The issue comprises of a fresh share sale worth ₹302 crore and an offer for sale (OFS) by existing promoters and shareholders for 1,17,56,910 equity shares aggregating up to ₹200 crore. Proceeds from the issue will be used for the 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.
The firm has raised ₹150.2 crore through its anchor book including Morgan Stanley, Societe Generale, Copthall Mauritius Investment, Whiteoak Capital, Ashoka India Equity Investment Trust, Turnaround Opportunities Fund and other mutual funds and insurance companies. It allocated 88,88,018 equity shares to anchor investors at ₹169 per equity share.
Read More: IREDA IPO allotment status, latest GMP, listing date & more
The IPO has reserved not more than 50 percent of the shares in the public issue for QIB, not less than 15 percent for NII, and not less than 35 percent of the offer is reserved for retail investors.
Nuvama Wealth Management and ICICI Securities are the book-running lead managers of the Gandhar Oil Refinery India IPO, while LinkIntime India is the registrar for the issue. The equity shares of the company will be listed on both the exchanges on December 5, as per the IPO schedule.
Should you subscribe?
Sushil Finance: Subscribe
The issue is priced at a P/BV of 1.67 based on its NAV of ₹101.35 as of June 30, 2023, and is asking for a PE multiple of 7.11 times on the upper end of the price band and using diluted EPS for FY23 and a PE of 7.54 times annualising diluted EPS for Q1FY24. Looking at all the factors, risks, opportunities and attractive valuation, the cash-rich investors may apply for the issue with a medium to long-term view, it said.
StoxBox by BP Equities: Subscribe
Overall, healthy financial performance, expansion of product portfolio, improvement of return ratios, and growing overseas business are key growth drivers for the company’s performance in the long term. The issue is valued at a P/E of 7.1 times on the upper price band based on FY23 earnings, which is fairly valued, said StoxBox with a ‘subscribe’ rating for the issue.
Ventura Securities: Subscribe
Gandhar Oil Refinery is a leading manufacturer of white oils by revenue with a growing focus on the consumer and healthcare end industries. As of June 30, 2023, the product suite comprised over 440 products primarily. The company’s products are used as ingredients by leading Indian and global companies for the manufacture of end products for the various sectors, it said.
Read More: Tata Technologies IPO Day 3: Firm surpasses Reliance, Nykaa with 51 lakh applications
Choice Broking: Subscribe
“We have a subscribe rating on the back of 1) a Leading market share of the Indian white oils market with significant overseas sales, focused on the consumer and healthcare end-industries; 2) Extensive and diversified customer base and a supplier base comprised of leading oil companies with competitive pricing terms; 3) Strategically located manufacturing facilities and in-house R&D capabilities; 4) Resilient, flexible and scalable business model with prudent risk management framework; and 5) Track record of consistent financial performance,” said Choice.
