All eyes are set on Paradeep Phospates Limited listing on Friday. Paradeep Phospates Limited shares will be listed on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) at 10 am on May 27. Paradeep Phospates initial public offering (IPO) received muted response from the investors during the subscription period. The public offer was booked 1.75 times over the 26.86 crore shares that were on offer.
Paradeep Phospates IPO opened for subscription between May 17-19. The price band for Paradeep Phospates IPO was fixed at Rs 39-42 per equity share. Paradeep Phospates IPO comprised a fresh issue of shares worth Rs 1,004 crore and an offer-for-sale (OFS) of 11.85 crore equity shares by promoters and other selling shareholders. As a part of OFS, Zuari Maroc Phosphates Pvt Ltd (ZMPPL) had a plan to offload 60,18,493 equity shares. The government of India would sell up to 11,24,89,000 equity shares. The government held 19.55 per cent stake in the company.
The company will not receive any proceeds from the OFS portion. Of the fresh issue net proceeds, Rs 520 crore will be used to partially fund the acquisition of Goa facility and another Rs 300 crore will be utilised for repayment/prepayment of the borrowings availed by the company.
Paradeep Phosphates IPO received bids of over 47.02 crore shares against the total issue size of over 26.86 crore shares, according to the data available with the NSE. The portion allocated for the qualified institutional buyers (QIBs) was subscribed 3.01 times. The shares allocated for the non institutional investors was subscribed 0.82 times. The retail individual investors (RIIs) quota was booked 1.37 times, the data showed.
Paradeep Phospates IPO Grey Market Premium
Paradeep Phospates unlisted shares received tepid response in the grey market. Paradeep Phospates IPO commanded a grey market premium of Rs 3 on May 16–19. However, the grey market premium of Paradeep Phospates lowered to Rs 0.20 on May 26, ahead of the listing, according Chankya Ni Pothi. The low interest in the unlisted market indicates a poor listing show on the domestic bourses.
Paradeep Phospates Listing Today: What to Expect
On Paradeep Phosphates IPO listing price, Ravi Singhal, vice chairman at GCL Securities said, “Shares of Paradeep Phosphates are expected to open at par. However, much will depend upon the kind of opening Indian market gets.”
“The issue was at reasonable valuations with strong prospects but the jittered sentiments of the secondary markets are weighing on the sentiments,” said Abhay Doshi, co-founder, unlisted Arena.
For investors, Ravi Singh, vice president and head of research, ShareIndia, said, Paradeep Phosphates is an established name in the Indian fertiliser industry backed by an extensive sales and distribution team. The company has shown robust growth and a stable business model with an an average EPS of Rs. 3.52 and an average RoNW of 11.91 per cent for the last three fiscals year. Also, a normal monsoon forecast coupled with ongoing geo political pressure  on commodities supply will add to the positive outlook of the overall industry. The issue price of the IPO is reasonably priced and can be considered for the long term and medium term investment.
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