Venus Pipes IPO: What GMP signals on last day of subscription

Market


The initial public offer of Venus Pipes and Tubes was subscribed 4.43 times on the second day of subscription on Thursday. According to the NSE data, the company’s 165.41-crore Initial Public Offer (IPO) received bids for 1,57,21,696 shares against 35,51,914 shares on offer.

The category for retail individual investors received 7.52 times subscription, while the portion for non-institutional investors got subscribed 2.61 times and qualified institutional buyers 36%.

The IPO is of 50,74,100 equity shares with no offer for sale (OFS) component and has a price range of 310-326 per share. Venus Pipes and Tubes has collected over 49 crore from anchor investors.

As per market observers, Venus Pipes shares are available at a premium (GMP) of 32 in the grey market today, up from 24 yesterday. The company’s shares are expected to list on stock exchanges BSE and NSE on Tuesday, May 24, 2022.

Proceeds from the issue will be used for financing the project cost towards capacity expansion and backward integration for manufacturing of hollow pipes, to meet working capital requirements and for general corporate purposes.

The Gujarat-based company is a growing manufacturer and exporter of stainless steel pipes and tubes in India. The company, under the brand name Venus, supplies its products for application in diverse sectors, including chemicals, engineering, fertilisers, pharmaceuticals, power, food processing, paper and oil and gas.

“The Company has delivered good growth in Sales over past few years along with increasing margin profile. However, Venus faces competition from its peers who hold substantial market share in the SS pipes and tubes market. When compared to its listed peers, Venus seems to be richly priced. We recommend an “Avoid” rating to this IPO,” said brokerage Anand Rathi in a note.

However, Bonanza Portfolio has recommended a subscribe for long term as “Venus Pipes and Tubes Ltd is backed with increasing commodity prices environment that is likely to reflect in their margins. It is also supported by the growth of the industry that it serves backed with favourable government policies.”

 

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