Mumbai: Tech Mahindra continued its dream run on the capital market with a sharp debut rally of over 51 per cent in its share price on Monday, after receiving over subscriptions of more than 72 times for its initial public offer earlier in August.
Shares of Tech Mahindra Ltd, an IT solutions joint venture between M&M and British Telecom, soared 51.4 per cent to close at Rs 552.80 in its debut trade after listing with a huge premium of 44 per cent at Rs 525 per share on the Bombay Stock Exchange.
Tech Mahindra barged into the country's top-100 market cap league, while making its shareholders richer by about Rs 2,176 crore on the very first day of its publicly listed history.
Tech Mahindra added Rs 187.80 per share in its share price over its initial public offer price of Rs 365 per share. The stock soared to an intra-day high of Rs 569 on the BSE after listing at a price of Rs 525 per share. The stock had hit a low of Rs 523 early in the morning trade.
The company's market capitalisation surged to over Rs 6,400 crore at the end of the day's trading, as against its market cap of Rs 4,230 crore based on the issue price of Rs 365 per share.
Tech Mahindra's market cap surpassed that of other top-100 market cap companies like Dr Reddy's, which is present in the 30-share Sensex, Jet Airways, Tata Tea, Patni Computer and Oriental Bank of Commerce.
The stock listed at Rs 521 at the National Stock Exchange and surged to as high as Rs 569. The stock had hit a low of Rs 502 before closing at Rs 553 per share at the NSE.
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Tech Mahindra's listing with a huge premium and a sharp surge of more than 50 per cent in its debut trade comes in sharp contrast to another recent listing by GMR Infrastructure, which has ended on a flat note on the first day of trading. GMR and Tech Mahindra issues had closed on the same day, August 4 with both receiving significant over subscriptions from the institutional investors.
However, the retail investors were seen to be more inclined towards the Tech Mahindra IPO. GMR had received an overall over subscription of nearly seven times. Tech Mahindra was listed for trading on both BSE and NSE on Monday after a successful IPO that was oversubscribed by more than 72 times. The stock was admitted for trading in the B1 Group of Securities at the BSE.
The company had offered to sell Rs 1.27 crore shares in the public issue, constituting 11 per cent of its total Rs 11.59 crore equity shares with a face value of Rs 10 each. The IPO consisted of fresh issue of 31.8 lakh equity shares and 95.6 lakh shares by its promoters M&M and British Telecom.
The IPO was priced at the top end of its estimated price band of Rs 315 to Rs 365 per share. The IPO received overwhelming response from all categories of investors, with Qualified Institutional Buyers (QIB) portion getting oversubscribed by more than 103 times. The HNI category was oversubscribed by 140.94 times and the retail category was oversubscribed by 7.68 times.
The company plans to use the IPO proceeds for its expansion plans. The book running lead managers to the issue were Kotak Mahindra Capital Company Limited and ABN AMRO Securities (India) Private Limited.
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