Western Carriers India IPO: A Promising Opportunity for Investors
The initial public offering (IPO) of Western Carriers India, a logistics company, has generated considerable interest among retail and non-institutional investors (NIIs). With a book-built issue valued at ₹492.88 crore, the IPO opened for subscription on September 13 and will remain accessible until September 19. Following the subscription period, share allotment is expected to be finalized on September 20, with the stock anticipated to list on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on September 24.
Current Grey Market Premium
As of today, shares of Western Carriers India are trading at a premium in the grey market, reflecting a bullish sentiment among investors. Reports indicate that the shares are currently priced at a premium of ₹50, a slight decrease from ₹58 the previous day but still significantly higher than last Friday’s ₹30. Given the current grey market premium (GMP) and the issue’s price band of ₹172, analysts predict that shares of Western Carriers India may debut at ₹222, representing a potential listing premium of 29.07%.
Subscription Status
By the end of day four of the bidding process, the IPO has seen robust subscription figures. As of 4:45 PM, the book-built issue was subscribed 13.85 times overall. The retail portion was particularly strong, with subscriptions reaching 18.55 times, while the NII segment was filled 20.87 times. However, the Qualified Institutional Buyers (QIB) portion has seen limited interest, receiving bids of only 0.14 times.
Expert Reviews and Recommendations
Market analysts and brokerage firms are largely optimistic about the Western Carriers India IPO, citing the company’s favorable valuation and promising growth prospects. Choice Equity Broking has issued a ‘subscribe’ recommendation, noting that at the higher price band, Western Carriers India is demanding an enterprise value-to-sales (EV/sales) multiple of 1 time, which is significantly lower than the peer average of 2.4 times. This attractive pricing, combined with the company’s strong market position among private players and the anticipated growth in rail logistics following the partial or full commencement of Dedicated Freight Corridors (DFCs), positions Western Carriers well for future expansion in multi-modal freight transportation.
Similarly, Anand Rathi Share and Stock Brokers have also recommended a ‘subscribe’ rating for the IPO. They highlight that at the upper price band, the company is valued at a price-to-earnings (P/E) ratio of 21.8 times, with a market capitalization of ₹17,536 million post-issue and a return on net worth of 22.4%. The brokerage firm believes that the company’s operational efficiency and growth plans will enhance service delivery, making it a compelling investment opportunity.
IPO Details
The Western Carriers India IPO features a price band ranging from ₹163 to ₹172 per share. The offering includes a fresh issue of 2.33 crore shares alongside an offer for sale (OFS) of 54 lakh shares, with the company aiming to raise ₹400 crore from the fresh issue. The proceeds from the IPO will be utilized to pay down borrowings and fund capital expenditure requirements.
Conclusion
As the subscription period for the Western Carriers India IPO progresses, the strong interest from retail and non-institutional investors, coupled with positive expert recommendations, suggests that this IPO could be a lucrative opportunity for those looking to invest in the logistics sector. With the share allotment expected on September 20 and a potential listing on September 24, investors are keenly watching this offering as it unfolds.
For those considering participation in the IPO, it is advisable to consult with certified financial experts to make informed investment decisions. As always, thorough research and understanding of market dynamics are crucial for successful investing.
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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.