The initial public offerings (IPOs) of Gandhar Oil Refinery, Flair Writing Industries and Fedbank Financial Services, which kicked off for subscription on November 22, have entered the second day of bidding process.

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Gandhar Oil Refinery

Gandhar Oil Refinery's ₹500.69 crore-IPO was subscribed 15.20 times so far on Day 2. The issue has received good response from non institutional investors and retail segment, with bids coming in for 32.28 crore shares against 2.12 crore offered shares.

Shares of the company were trading with a premium of ₹73 in the unlisted market today, signaling a listing premium of 43.2%. The grey market is an unofficial platform wherein the IPO shares can be bought and sold till the listing.

The offer includes a fresh equity issue of ₹302 crore and an offer for sale (OFS) of ₹199 crore. Under the OFS, promoter-selling shareholders Kailash Parekh, Gulab Parekh, and other selling shareholders – Green Desert Real Estate, and Fleet Line Shipping among others will offload shares.

The capital raised will be utilised for the payment of debt and for the purchase of equipment and civil work required for expansion in the capacity of automotive oil at the Silvassa plant.

Analysts advised investors to subscribe to the IPO given its strong financials, growing overseas opportunities and attractive valuation.

With a track record of consistent financial performance, strategically located manufacturing facilities and R&D capabilities, experienced management team and highest return ratios, Reliance Securities recommends a 'Subscribe' tag to the issue.

Gandhar Oil is a manufacturer of white oils by revenue with a growing focus on the consumer and healthcare end-industries. The company currently operates with three manufacturing facilities; two plants in Western India and one in Sharjah, United Arab Emirates to cater to domestic and global operations.

Flair Writing

The issue of Flair Writing Industries Limited continued to witness a decent response from the market with investors picking up 5.96 crore equity shares against an offer size of 1.44 crore, leading to a 6.07 times subscription so far on Day 2. The issue closes on November 24.

In the grey market, Flair Writing Industries is commanding a listing premium of 24%, compared to its IPO price of ₹304.

The quota set aside for non institutional investors was booked 9.96 times, followed by the retail category at 7.10 times. The part reserved for qualified institutional buyers was subscribed 1.36 times till now.

Rajan Shinde of Mehta Equities believes Flair writing IPO gives investors an opportunity to invest in a leading four-decade old player in writing instruments which the flagship brand "Flair".

"Being among the top three players in the overall writing instrument industry with a market share of 9% in overall writing and creative instruments industry in India, we believe the company is strategically positioned coupled with a track record of sustained growth," Shinde said with a 'Subscribe' rating to the issue with a long-term perspective.

The IPO has a price band of ₹288-304 per share, and investors can bid for a minimum of 49 equity shares in one lot and in multiples thereafter.

Flair Writing plans to raise ₹593 crore via its IPO route out of which fresh issue of equity shares of ₹292 crore will come into the company and an OFS of ₹301 crore will be raised by the selling shareholders.

Fedbank Financial

Out of all the five IPOs opened for bidding, Fedbank Financial has seen the least amount of interest with 0.90 times subscription rate on the second day so far. The issue will run till November 24.

Retail investors have bought 1.25 times their allotted quota of shares, non-institutional investors have picked up 52%, while qualified institutional buyers have subscribed 56%.

Fedbank Financial has also reserved shares worth ₹10 crore for its employees, who will get a discount of ₹10 per share during the IPO. This category was booked 0.78 times.

Shares of Fedbank Financial were trading with a premium of just ₹2 in the grey market today. The GMP was ₹5 on November 22.

The price band for the Federal Bank arm IPO has been fixed at ₹133-140 per share. Fedbank Financial Services will be raising ₹1,092 crore at the upper end of the price band via the public offer.

The IPO consists fresh equity issue worth ₹600 crore, and an OFS of 3.5 crore equity shares. Under the OFS, 1.64 crore equity shares will be offloaded by Federal Bank and 5.38 crore shares by True North Fund VI LLP, the private equity fund.

Shreyansh Shah of StoxBox has recommended investors to 'Subscribe' to the IPO for the benefit of listing gains. "The NBFC has an effective underwriting capability due to its experienced underwriting team and established processes which is likely to keep asset quality issues at bay going forward."

First Published:Nov 23, 2023 1:21 PM IST