BMW Ventures IPO Enters Final Day with 22% Subscription, Aims to Raise Rs 231.66 Crore
BMW Ventures Ltd., a Bihar-based steel products distributor, entered the final day of its IPO with a 22% subscription rate. The company aims to raise Rs 231.66 crore through a fresh issue of 2.34 crore equity shares, priced between Rs 94-99 per share. The IPO opened slowly but gained momentum, driven primarily by institutional investors. BMW Ventures plans to use Rs 174 crore of the proceeds for debt repayment. The grey market premium stands at Rs 8, indicating an estimated listing price of Rs 107.
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BMW Ventures Ltd., a Bihar-based steel products distributor, entered the final day of its Initial Public Offering (IPO) on Friday, with the subscription rate standing at 22% after two days of bidding. The company is looking to raise Rs 231.66 crore through a fresh issue of 2.34 crore equity shares.
Subscription Details
The IPO opened with a slow start, achieving an 11% subscription rate on the first day. However, it gained momentum on the second day, reaching 22% subscription, primarily driven by institutional investors. The Qualified Institutional Buyers (QIB) portion was subscribed 0.45 times, while the Non-Institutional Investors (NII) and retail portions were subscribed 0.15 times and 0.18 times, respectively.
Offer Details
| Item | Details |
|---|---|
| Price Band | Rs 94 - Rs 99 per share |
| Issue Size | 2.34 crore equity shares |
| Minimum Investment | Rs 14,949 for 151 shares |
Company Profile
BMW Ventures Ltd. operates as a distributor of steel products in Bihar. Their product portfolio includes:
- Long and flat steel products
- TMT bars
- GI sheets
- Wire rods
Additionally, the company deals in tractor engines and manufactures PVC pipes and railway bridge components.
Fund Utilization
Out of the total proceeds, BMW Ventures plans to allocate Rs 174 crore towards debt repayment. The company currently holds total borrowings of Rs 428 crore.
IPO Timeline
| Event | Date |
|---|---|
| IPO Opening Date | September 25 |
| IPO Closing Date | September 27 |
| Allotment Date | September 29 |
| Listing Date | October 1 |
Market Sentiment
The grey market premium for BMW Ventures stands at Rs 8, indicating an estimated listing price of Rs 107.
Financial Outlook
While the IPO aims to reduce the company's debt burden significantly, investors should note that the subscription rate of 22% on the penultimate day suggests a cautious market response. The company's diverse product range in the steel sector and its expansion into related industries like PVC pipes and railway components could be potential growth drivers.
In the fiscal year 2023, BMW Ventures reported a revenue of Rs 1,500 crore and a net profit of Rs 45 crore, showing a year-on-year growth of 15% and 20% respectively.
Risks and Challenges
Investors should be aware of potential risks such as fluctuations in raw material prices, intense competition in the steel industry, and the cyclical nature of the sector.
As the IPO enters its final day, it remains to be seen whether the subscription rate will pick up, especially among retail investors. Potential investors should carefully consider the company's financials, growth prospects, and the overall market conditions before making an investment decision.
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