EPACK Durable witnessed a lackluster debut on the stock exchanges as its shares opened at a 4% discount, starting at ₹221 on the National Stock Exchange (NSE). This marked a 3.9% decline from the issue price of ₹230. The Bombay Stock Exchange (BSE) also reported a drop, with EPACK Durable shares listed at ₹225 apiece, reflecting a 2.17% decrease compared to the issue price.
Market analysts had previously projected a share price ranging between ₹225 to ₹235. Despite the subdued debut, the EPACK Durable Initial Public Offering (IPO) successfully navigated a three-day subscription period, garnering favorable responses from both retail and non-institutional investors. The subscription status on the third day stood at an impressive 16.37 times, according to data from the BSE.
The EPACK Durable IPO was open for subscription from January 19 to January 24, with a price band set at ₹218 to ₹230 per equity share with a face value of ₹10. The lot size for the IPO was fixed at 65 equity shares, with multiples of 65 equity shares thereafter. The allocation for qualified institutional buyers (QIBs) was capped at 50%, while non-institutional investors (NIIs) were allotted a minimum of 15%, and retail investors were reserved not less than 35% of the total shares offered to the public.
The IPO, valued at ₹640.05 crore, comprised a fresh issue of ₹400 crore and an offer-for-sale (OFS) of 1.04 crore equity shares by promoters and other investors. In the OFS segment, shares valued at ₹119 crore, belonging to the promoter group, were set to be sold by individuals including Bajrang Bothra, Laxmi Pat Bothra, Sanjay Singhania, Ajay DD Singhania, Pinky Ajay Singhania, Preity Singhania, Nikhil Bothra, Nitin Bothra, and Rajjat Kumar Bothra.
The intended utilization of the net proceeds from the IPO included financing capital expenditures for establishing or expanding manufacturing facilities, repaying or prepaying outstanding company loans, and addressing general corporate needs. The book running lead managers for the EPACK Durable IPO were Axis Capital Limited, DAM Capital Advisors Limited, and ICICI Securities Limited, while the registrar was KFin Technologies Limited.
In terms of the grey market premium (GMP), EPACK Durable IPO exhibited a GMP of +5, consistent with the previous session but slightly higher than the previous day’s +3. This implied that EPACK Durable shares were trading at a premium of ₹5 in the grey market, as reported by investorgain.com.
Taking into consideration the upper end of the IPO price band and the current grey market premium, analysts estimated the listing price of EPACK Durable shares at ₹235 apiece, representing a 2.17% increase over the IPO price of ₹230. However, recent trends in the grey market indicated a shift towards the lower side, with the GMP ranging from ₹0 to ₹31 over the last 22 sessions, according to analysts at investorgain.com.
In conclusion, EPACK Durable’s weak market debut, though disappointing, did not overshadow the overall success of its IPO subscription, which saw robust interest from various investor categories. The company’s future performance on the stock exchanges will likely be influenced by market dynamics and investor sentiment in the coming days.
As EPACK Durable navigates its journey in the public market, it’s important to consider the broader context of its IPO and market debut. The company’s decision to go public was a significant step in its growth strategy, aiming to raise capital for expansion and debt reduction. The mixed response at the market opening, while notable, is not uncommon in the volatile environment of stock markets, where investor sentiments can be influenced by numerous external factors including market conditions, economic indicators, and company-specific news.
The IPO structure, with a combination of fresh issue and offer-for-sale, reflected a balanced approach to fundraising, allowing the company to secure capital for growth while providing an exit or partial exit for existing investors. This structure is typical in many IPOs, offering benefits to both the company and its shareholders.
The role of the book running lead managers – Axis Capital Limited, DAM Capital Advisors Limited, and ICICI Securities Limited – was crucial in determining the IPO pricing, marketing the issue, and guiding the company through the complex process of going public. Their expertise often plays a significant role in the success of an IPO.
The grey market premium (GMP), while not an official indicator, provides an early sentiment among investors about the IPO. The fluctuations in EPACK Durable’s GMP suggested a cautious optimism among these investors. However, it’s important to remember that the GMP does not always accurately predict the actual market performance of a stock post-listing.
In summary, while EPACK Durable’s debut on the stock market was less than stellar, it’s essential to view this in the context of the overall IPO process and market dynamics. The company’s long-term performance in the public market will depend on various factors including its financial performance, growth strategy, and the broader economic environment. Investors and market watchers will continue to monitor its progress closely in the coming quarters.