Dixon Tech ends 63.8% up on mkt debut
MUMBAI: Consumer electronics manufacturer Dixon Technologies made a stellar stock markets debut on Monday, closing at ₹2,892.80, up 63.8% from its issue price of ₹1,766 per share. It was listed on the bourses at ₹2,725 per share, offering a premium of 54.30% from its issue price and soared 71%, touching an intraday high at ₹3,020.35 per share on the BSE.
This is one of the best stock markets listing after Avenue Supermarts Ltd and Central Depository Services (India) Ltd or CSDL in 2017. Avenue Supermarts Ltd gained 114.30% and CSDL climbed 75.57% at closing on first day of trade.
On the other hand, Bharat Road Network Ltd (BRNL), which also got listed on exchanges on Monday, made a tepid start. It closed at ₹208.15, up 1.5% higher from its issue price of ₹205 per share. The road builder’s ₹600 crore IPO was subscribed 1.81 times last week.
The issue of Dixon Technologies, red-flagged by few analysts on valuation concerns, was oversubscribed 117.83 times at a price band of of ₹1,760-1,766 per share. The IPO of Dixon Technologies was open for subscription from September 6-8. The portion reserved for qualified institutional buyers was oversubscribed 134.66 times, for non-institutional investors 345. 61 times and for retail individual investors 10.60 times. The company was aiming to raise ₹600 crore.
Ahead of its IPO, the company had raised ₹179.79 crore by selling shares to institutional investors from the so-called anchor book allocation. Institutional investors who participated in the anchor book allocation include Steadview Capital Mauritius Ltd, DSP Blackrock, Kuwait Investment Authority, Goldman Sachs India Fund, Franklin Templeton Mutual Fund, HSBC MF, Nomura Funds, HDFC MF, Birla Sunlife MF, SBI MF, ICICI Prudential AMC and Kotak MF.
“We do not find anything wrong with the business model but we are not comfortable recommending investors to invest in such low margin business. At the higher price band of ₹1,766, the stock is valued at 39.7 price to earnings (PE) on FY17 basis,” said Centrum Broking Limited in a note on September 5.