Unlisted shares of Kross Ltd are trading Rs 50 higher in the grey market, signalling a 20.83 per cent listing gain from the public issue.
Kross IPO: The initial public offering of auto parts manufacturer Kross Ltd, which is going to be closed on Wednesday, September 11, has received around 4 times subscription so far. The price band of the Rs 500-crore IPO has been fixed at Rs 228 to Rs 240 per share for the public issue. Till 10:55 am on the final day of bidding on Wednesday, the IPO received a 3.89 times subscription garnering bids for 5,67,32,852 shares as against the 1,45,83,333 shares on offer.
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The category for non-institutional investors received 5.52 times subscription, while the portion for retail individual investors (RIIs) got subscribed 5.4 times. The QIB subscription received a 0.03 times subscription.
The IPO was opened for public subscription on September 9. The share allotment of the Kross IPO will likely be finalised on September 12, while its shares will be listed on both BSE and NSE on September 16.
The price band of the Rs 500-crore IPO has been fixed at Rs 228 to Rs 240 per share for the public issue.
Kross IPO: GMP Today
According to market observers, unlisted shares of Kross Ltd are trading Rs 50 higher in the grey market than its issue price. The Rs 50 grey market premium or GMP means the grey market is expecting a 20.83 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.
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Kross IPO: Analysts’ Recommendations
Most brokerage firms have given a ‘subscribe’ recommendation to the IPO.
Giving a ‘subscribe for long-term’ rating, SBI Securities in its IPO note said the issue appears to be fairly valued given the healthy growth track record of the company. “We recommend subscribing to the issue for long term investment horizon,” the firm said in a note.
Another brokerage firm Deven Choksey Research has also granted ‘subscribe’ rating to the IPO.
“With a strong track record of financial performance and a commitment to innovation, Kross Limited stands to benefit from the ongoing demand for high-quality, safety-critical components. The company is expected to trade at an adjusted PE multiple of 34x at the upper price band. Given the impressive growth metrics and competitive positioning, coupled with high return ratios compared to its peers, we assign a ‘SUBSCRIBE’ rating for Kross Limited’s IPO,” Deven Choksey Research said.
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Kross IPO: Anchor Investment
Kross Ltd mobilised Rs 150 crore from anchor investors ahead of its initial public offering (IPO). EastSpring Investments, Mathews Asia Funds, LIC Mutual Fund (MF), ICICI Prudential MF, Axis MF, Kotak Mahindra MF, Motilal Oswal MF, Edelweiss MF and Max Life Insurance Company are among the anchor investors.
According to a circular uploaded on BSE’s website, Kross Ltd around Rs 150 crore from 19 funds including mutual funds by allotting 62.49 lakh equity shares at Rs 240 per equity share — the upper end of the price band.
Kross IPO: More Details
The Jamshedpur-based company’s IPO is a combination of a fresh issue of equity shares worth Rs 250 crore and an Offer for Sale (OFS) aggregating up to Rs 250 crore by the promoters.
The OFS portion consists of equity shares to the tune of up to Rs 168 crore by Sudhir Rai and Rs 82 crore by Anita Rai.
The issue, with a price band of Rs 228-240 per share, will open for public subscription on September 9 and conclude on September 11.
Kross proposes to utilise the net proceeds of the fresh issue for the purchase of machinery and equipment, payment of debt, and funding the working capital requirements of the company. Besides, a portion will be used for general corporate purposes.
Bids can be made for a minimum of 62 equity shares and in multiples of 62 equity shares thereafter.
Founded in 1991, Kross is a diversified player focused on manufacturing and supply of trailer axle and suspension assembly and a wide range of forged and precision machined high-performance safety critical parts for medium and heavy commercial vehicles and farm equipment segments.
Equirus Capital is the sole book-running lead manager to the issue. The equity shares are proposed to be listed on the BSE and the NSE.
