MUMBAI: Grey market premium for Antony Waste Handling Cell shares has fizzled and is currently quoting at around 39-40 per cent over the issue price, implying chances that the stock may see the least impressive debut on the bourse in recent times. The issue is likely to make its debut on the bourses on January 1.
The grey market premium for the IPO quoted at Rs 123-125 in the unofficial market, dealers said. The issue was subscribed 15 times, much less than some other IPOs that hit the market in the recent past, because the grey market premium for it has come down sharply. The retail investors’ portion of the IPO was subscribed 16.54 times, non-institutional investors quota 18.68 times, and the portion set aside for qualified institutional buyers 9.67 times.
“The company is seeing interest only because the IPO market has been in robust shape. People are just putting in money for listing gains,†said Dinesh Gupta, founder of Unlisted Zone.
In its first attempt in March, the company offered its Rs 206 crore issue in the price band of Rs 295-300. But it could not generate enough bids to sail through despite extending the IPO deadline mainly because of volatility and uncertainty over rising Covid-19 cases globally at the onset of the pandemic.
Another dealer, who did not wish to be named, said this particular IPO is seeing volatile prices in the grey market. He said while the early interest in the IPO was weak with the unlisted shares quoting at a merely Rs 18-20 premium, but the interest picked up later and the premium touched a high of Rs 192. The stock dipped to Rs 123-125 on Tuesday. “It’s a small issue, and it does not make a strong case for investment,†the dealer said.
“Ever since the lockdown began, the IPO application numbers have gone up. People are jumping into the IPO market, without understanding the fundamentals, which has increased volatility,†he said.
Prabhudessai Lilladher recommends investors to subscribe to the IPO from a near-term perspective, as it sees reasonable listing gains given the strong market sentiment and enormous outperformance of the recent public issues, but was cautious from a long-term perspective. “However, we remain cautious on its long-term growth prospects based on factors like large dependency on projects from state governments, primarily municipal corporations (unstable budget allocation for MSW management), a highly competitive market (with presence of local, national and global players), untested and still emerging business models, huge capex required for growth and rich valuation,†PL analysts said in a note.
Antony Waste Handling Cell is the second largest player in the Indian municipal solid waste management industry with end-to-end capabilities. It is among the key players in landfill construction and management sector in India with in-house expertise for landfill construction and operations. It operates one of the largest single-location waste processing plants in Asia with a capacity to handle up to 6,500 tonnes of MSW per day. It offers services such as solid waste collection, transportation, processing and disposal services across the country, primarily catering to Indian municipalities.
In recent times, IPOs have seen stellar listing pops. Mrs Bectors saw 74 per cent listing gains in market debut on December 24, Burger King saw more than 92 per cent listing gains on December 24, Mazagaon got listed at a near 50 per cent premium on October 12, Chemcon Speciality saw a 115 per cent surge on October 1, Happiest Minds Technologies rallied 111 per cent during market debut.
