Precision Camshafts IPO subscribed 1.89 times

Mumbai: Precision Camshafts Ltd, the first initial public offering (IPO) of calendar year 2016, was fully subscribed by investors on the last day of the share sale, data available with the stock exchanges shows.

The auto component manufacturer opened its initial share sale on 27 January to raise ₹ 400 crore from the primary market.

The IPO managed a good performance despite a volatile secondary market. The benchmark Sensex is down 4.77% from the start of the year and 17.17% or 5,154.05 points from its all-time high of 30,024.74 points recorded in March 2015.

“The institutional demand was driven mostly by domestic institutional investors, though several foreign investors have also participated in the IPO,” said an investment banker who was involved in the offering, adding that retail investor participation was also strong despite the market volatility in the run-up to the IPO. He requested anonymity as he is not authorized to speak to the media.

The firm had set a price band of ₹ 180-186 for its shares. The share sale involved primary capital-raising to the tune of ₹ 240 crore through the issuance of fresh shares, while the promoters of the company sold 9.15 million shares through an offer for sale.

At the upper end of the price band, the offer for sale component of the issuance will fetch ₹ 170.2 crore for the selling shareholders.

The company manufactures camshafts, a critical part of an automobile engine. The firm supplies over 150 varieties of camshafts for passenger vehicles, tractors, light commercial vehicles and locomotive engine applications from its manufacturing facilities in Solapur, Maharashtra.

The company will use the IPO proceeds for establishing a machine shop for ductile iron camshafts at its export-oriented unit at Solapur.