Western Carriers IPO Sees Strong Demand: Subscribed 18 Times on Day 3, GMP Rises to 20%

The initial public offering (IPO) of Kolkata-based logistics company Western Carriers (India) Ltd. garnered significant interest, with the issue being subscribed 18.61 times by the close of bidding on Day 3. The strong demand was led by non-institutional investors (NIIs) and retail investors, while the portion reserved for qualified institutional buyers (QIBs) saw a lower subscription rate.

The IPO received bids for a total of 38.84 crore shares against an issue size of 2.08 crore shares. The NII category was subscribed a remarkable 33.30 times, while retail investors bid 22.58 times the allotted shares. In contrast, the QIBs’ portion was subscribed 0.37 times, reflecting relatively subdued demand from institutional players.

In the unlisted grey market, shares of Western Carriers were trading at a premium of ₹35, translating to a 20% premium over the issue price. This is lower than the previous day's grey market premium (GMP) of ₹50, indicating a decline in market sentiment. Nonetheless, the IPO continues to trade at a healthy premium, showcasing strong market expectations.

Ahead of the IPO, the company raised ₹148 crore from anchor investors, including prominent names like Societe Generale, Citigroup Global Markets Mauritius, Aditya Birla Sun Life Insurance, Kotak Mahindra Life Insurance, and Motilal Oswal Mutual Fund, among others.

Western Carriers priced its shares within a range of ₹163-172 per share. At the upper limit, the company's post-listing market capitalization is projected to reach ₹1,754 crore.

The IPO comprises a fresh issue of equity shares worth ₹400 crores, coupled with an Offer For Sale (OFS) of up to 54 lakh equity shares, valued at ₹792.88 crores, by the promoter and selling shareholder Rajendra Sethia.

Proceeds from the fresh issue will primarily be used to prepay or repay borrowings amounting to ₹163.5 crore. Additionally, the company plans to allocate ₹151.7 crore for capital expenditure, which includes the purchase of commercial vehicles, containers, and reach stackers. The remaining funds will be used for general corporate purposes.

Founded in March 2010, Western Carriers (India) Ltd. has a diverse clientele that includes Tata Steel, Hindalco Industries, Vedanta, BALCO, HUL, Coca-Cola India, Tata Consumer Products, Wagh Bakri, Cipla, Haldia Petrochemicals, and DHL, among others.

ALSO READ| Key Highlights from NTPC Green Energy's ₹10,000 Crore IPO Draft Prospectus

For the financial year ending March 31, 2023, Western Carriers saw a 3% increase in revenue and a 12% rise in profit after tax (PAT), reflecting a steady performance amid industry challenges.

JM Financial and Kotak Mahindra Capital are serving as the book-running lead managers for the IPO, while Link Intime India is the registrar. The allotment of shares is expected to be finalized by September 19, and the equity shares are slated for listing on the BSE and NSE on or around September 23, 2024.