Shares of Endurance Technologies Ltd, an Aurangabad-based automobile parts maker, debuted at 20.76% premium. Its Rs.1,160 crore initial public offer (IPO) was subscribed 43.7 times last week.
At 10.08am, Endurance Technologies shares were up 24.5% on the BSE to Rs.587.65 a share, compared to its issue price of Rs.472. The stock opened at Rs.570 and touched a high and a low of Rs.591.45 and Rs.570 a share. India’s benchmark 30-share Sensex index was trading 0.08% lower at 28,029.74 points.
Peer companies Bharat Forge was up 1.2%, Munjal Showa Ltd rose 0.6%, Mahindra CIE Automotive Ltd rose 0.8% and Rico Auto Industries Ltd gained 1%.
The issue received bids for 752.6 million equity shares as against 17.2 million shares on offer. The quota reserved for qualified institutional buyers was subscribed 53.43 times, while non-institutional investors’ portion was subscribed 127 times. Retail investors, whose investments cannot exceed Rs.2 lakh in an IPO, bid for about 2.5 times their quota.
The three-day public issue closed on 7 September, and Endurance Tech had set a price band of Rs.467-472 per share.
The Endurance IPO is a pure offer for sale by existing investor Actis and promoter Anurag Jain. While Actis is selling 19.29 million shares, Jain is selling 5.3 million shares. The issue will constitute up to 17.5% of the company’s post-offer capital. Actis bought the Endurance stake in 2011 for $70 million (approximately Rs.373 crore) from Standard Chartered Private Equity.
On 4 October, the company raised around Rs.348.50 crore by allotting 73.84 lakh shares to anchor investors by selling shares at Rs.472 apiece. The government of Singapore, Monetary Authority of Singapore, Nomura, Goldman Sachs and Amundi were allocated shares in the anchor allotment, besides domestic investors such as ICICI Prudential, Reliance Capital, UTI Mutual Fund, Axis Mutual Fund and Birla Sun Life subscribed to shares in the anchor book.
Broking firm KR Choksey, India Nivesh, Spa Securities and Phillip Capital had given subscribe rating to the issue.
According to the KR Choksey report dated 5 October, the presence in multi-component auto products, increasing customer base, strong relationship with original equipment manufacturers and presence across geographies will help the company improve its revenue visibility in the coming days. Its focus on improving research and development capabilities in order to focus on advanced technology and high value-add products will ensure consistent profitable growth, the report said.
“ETL offer comes at a price earnings of 22.54x and 22.79x respectively on FY16 diluted earning per share of Rs.20.71. We maintain a positive view on the company with long term upward bias and expect the company to deliver healthy profitable growth going forward,” the K.R. Choksey report added.
In 2015-16, the company’s net sales rose 6.6% to Rs.5,240.6 crore from Rs.4,916.9 crore a year ago. Net profit rose 15% toRs.291.2 crore. The company has a total debt of Rs.956.59 crore, as of June.
Endurance was established in 1985 as Anurang Engineering Co. Pvt. Ltd to manufacture aluminium die casting products in Aurangabad, Maharashtra. The company derives almost 44% of its revenue from its aluminium casting business and the rest comes from suspension, transmission and braking products. Endurance has 24 manufacturing facilities—17 in India, five in Italy and two in Germany.
Some of its customers include Bajaj Auto Ltd, Honda Motorcycle & Scooter India Ltd, Royal Enfield, India Yamaha Motor, Hero Motorcorp, Mahindra & Mahindra and Tata Motors.
This story was first published on Livemint