In the biggest IPO in nearly three years, leading coffee chain operator Coffee Day Enterprises’ Rs 1,150-crore public issue was over-subscribed 1.81 times on the last day of the bidding today. (Reuters)
The initial public offering of Coffee Day Enterprises received 1.81 times the subscription on the closing day on Friday, with strong backing from institutional investors, and a tepid response from high-networth individuals and retail investors. At end of Friday’s subscription, the company is now assured of Rs1,150 crores it had planned to raise through the IPO.
Qualified institutional bidders (QIBs) continued to exhibit their confidence in the largest IPO deal since December 2012, stock exchange data showed Friday. Institutional investors bid for 3.23 crore shares as compared to 73.80 lakh shares reserved for the category, data showed. The QIB book was subscribed 4.39 times.
The non-institutional category – comprising of high net-worth individuals (HNIs) – bid for 29.20 lakh shares against a reservation of 53.88 lakh shares. The book was subscribed 0.54 times and experts said the weak undertone in secondary markets made margin funding risky.
Retail category was subscribed 0.9 times as investors applied for 1.13 crore shares against an offering of 1.25 crore shares on offer.
On Tuesday, the Bengaluru-based company had raised around Rs 334.27 crore through a pre-IPO placement to anchor investors. A little over 1.03 crore shares were allotted to 17 institutional investors at a price of Rs 322 apiece. List of anchor investors included Blackrock, Government Pension Fund Global, ICICI Prudential Mutual Fund, Merrill Lynch, Swiss Finance Corp and Axis Mutual Fund.
The public issue, which closed on Friday, is priced at Rs 316-328 per piece. The company aims to raise a total of Rs 1,150 crore public investors to pay back existing debts and for general corporate purposes. The company aims to retire Rs 632.8 crore of its total debt, according to information made available in the draft prospectus.
Kotak Investment Banking, Citigroup, Morgan Stanley, Axis Capital, Edelweiss and Yes Bank are the lead book running managers for the issue.
Coffee Day Enterprises is the parent company of Coffee Day Group and the company operates the largest chain of coffee stores in India. The company also has presence in real estate sector through a subsidiary, Sical Logistics. It also owns a 16.75% equity holding in information technology company, Mindtree. Shares of Sical Logistics ended down 2.8% at Rs 159.70 per share on the BSE, exchange data showed.
During the calendar 2015, sixteen companies have raised close to Rs 7,650 crore from primary markets so far, data from Prime Database show.
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