Tega Industries’ IPO subscribed 4.67 times on day 1

At the end of day one, the overall book, excluding the anchor allotment, was subscribed 4.67 times after getting bids for about 44.66 million shares, according to stock-exchange data.

Retail investors placed bids for 7.51 times the shares reserved for them. Non-institutional investors bid for 4.17 times of their quota while institutional investors subscribed 0.07 times.

The firm which offers products and services to the mining industry, raised ₹185.76 crore from a bunch of anchor investors on Tuesday by allotting 4.1 million shares at the upper end of the price band of ₹443-453 a share.

At the upper price band of ₹453, Tega Industries is demanding a PE multiple of 18.79x of FY21 earnings, which is lower than the industry average of 31.71x. The company’s price to sales ratio is at 3.73x of FY21 revenue.

“Considering that it is a market leader of specialized products, has recurring revenues that is insulated from the mining capex cycles, plans of expansion, increasing manufacturing capacities and open for strategic acquisition of businesses, we recommend ‘Subscribe’ to the issue with a long-term perspective”, said IIFL Securities in a note to its investors.

Meanwhile, the ₹7249 crore initial share sale of Star Health & Allied Insurance Co Ltd continued to get weak response for its IPO on the second day.

The overall book, excluding the anchor allotment, was subscribed just 20%. As of 5pm, retail investors, whose investments cannot exceed the maximum cap of ₹2 lakh in an IPO, applied for 89% or 0.89 times the shares on offer.

The non-institutional category comprising high net worth individuals drew 2% or 0.02 times the shares reserved for the category. The institutional investors category subscribed 0.07 times, stock exchange data showed.