The JNK India IPO, which commenced yesterday, April 23, 2023, is garnering strong demand from various investor categories. As of 11:33 IST on its second day of subscription, the issue has witnessed bids for 73,92,492 shares against the 1,10,83,278 shares on offer, reflecting a subscription level of 67%.
Breaking down the subscription data, the retail investors’ segment has received bids for 41,44,464 shares against the 56,05,596 shares reserved for them, indicating a subscription rate of 74%. The non-institutional investors (NIIs) have subscribed to 11,73,744 shares out of the 24,02,399 shares allotted to their category, resulting in a subscription rate of 49%. Meanwhile, the quota for qualified institutional buyers (QIBs) has been subscribed 67%, with bids received for 20,74,284 shares against the 30,75,283 shares offered.
On the first day of the IPO, approximately half of the issue was subscribed, with QIBs taking the lead with a 67% subscription, followed by retail investors at 48% and NIIs at 25%. This even distribution of demand across all categories is a positive sign for the IPO’s prospects.
Commenting on the subscription status, Arun Kejriwal, founder of Kejriwal Research and Investment Services, noted that the issue is likely to be fully subscribed today. He highlighted the significance of having subscriptions in all three categories, indicating a well-rounded demand for the IPO.
The JNK India IPO comprises a fresh issue of shares worth 300 crore and an offer-for-sale (OFS) of up to 84,21,052 equity shares by the promoter selling shareholders. The company intends to utilize the net proceeds from the IPO for various purposes, including meeting general corporate objectives and working capital requirements.
Several leading brokerages have issued their reviews and recommendations for the JNK India IPO. Ltd., in its report, highlighted the company’s focus on manufacturing heating equipment for process sectors and its plans to expand into the renewable energy space. The report also emphasized the company’s robust financial performance over the last three fiscal years and its strong order book of 845 crore as of December 31, 2023.
Nirmal Bang, in its analysis, acknowledged JNK’s lower valuation compared to peers but highlighted its superior growth and return ratios. The brokerage expressed optimism about the company’s prospects due to its favorable industry structure, limited competition, and strong order backlog. Both brokerages recommended subscribing to the IPO with a long-term perspective.
In the grey market, JNK India shares are commanding a premium of 25, indicating strong investor sentiment. This suggests that the shares are likely to list at a premium of 6.02% over the IPO price of 415, at around 440 per share.
The JNK India IPO is expected to close on Thursday, April 25, 2023. With the strong subscription levels witnessed so far, the IPO is poised for a successful completion.
