Sai Silks IPO Off to a Weak Start; Subscribed 7%

20 Sep 2023 , 08:21 PM

On the first day of bidding, which took place on September 20, Sai Silks Kalamandir’s public issue witnessed a low subscription rate, totaling just 7%. The subscription data available on the exchanges shows that bids were received for 26.23 lakh equity shares against an offer size of 3.84 crore shares.

Retail investors and high-net-worth individuals subscribed to 12% and 3% of their reserved portion, respectively, which represents 35% and 15% of the total offer size. In contrast, qualified institutional buyers (QIB) placed bids for only 9,112 shares, falling significantly short of their reservation of 1,06,64,594 shares, which constitutes 50% of the offer size.

Sai Silks Kalamandir, a company based in Andhra Pradesh, aims to raise Rs 1,201 crore through its public issue. This offering comprises a fresh issue of shares worth Rs 600 crore and an offer-for-sale (OFS) of shares worth Rs 601 crore by the promoter group, at the upper end of the price band.

The price band for this offering, which is set to close on September 22, is fixed at Rs 210-222 per share. The net proceeds from the fresh issue will primarily be allocated for various purposes, including the establishment of 30 new stores with a cost of Rs 125.08 crore, the construction of two warehouses with a budget of Rs 25.4 crore, and addressing working capital requirements amounting to Rs 280.07 crore. Additionally, the company intends to utilize a portion of the issue proceeds to repay its existing debt of Rs 50 crore.