Endurance Tech's IPO subscribed 43 times

Good demand from institutions, HNIs

The Rs 1,160-crore initial public offer (IPO, of equity) of Endurance Technologies saw 43 times more demand than the shares on offer. There were 752 million bids, worth Rs 35,000 crore, against the 17.2 mn shares on offer.

The institutional investor category was subscribed 53.4 times and the high net worth individual portion by 127 times. The retail (small investor) category saw relatively lukewarm response, of only two times the subscription, a total of 20.4 mn bids against the 8.6 mn shares on offer.

Investment bankers say the cautious approach of retail investors was due to the disappointing performance of recent IPOs on the listing day. ICICI Prudential Life Insurance listed on the bourses last week and slumped 11 per cent on the listing day. HPL Electric and Power listed earlier this week and fell six per cent on its debut.

Aurangabad-based Endurance had raised Rs 348.5 crore by allotting shares to anchor investors. This was at Rs 472 each, the upper price band. The list of institutions that were part of the anchor book included the Government of Singapore, Nomura, Goldman Sachs and Axis mutual funds.

The automobile parts maker’s offering was entirely a secondary share sale.One of the investors, Actis Private Equity, offloaded its entire 13.72 per cent stake in the IPO. The promoters also trimmed their stake by 3.78 percentage points. Axis Capital and Citigroup Global Markets were the book-running lead managers to the issue.

A number of brokerages had given a positive call on the Endurance IPO. In a note to investors, Philip Capital recommended they subscribe, citing high growth potential of the company and enough money on the table for investors. “Endurance Technologies is one of the leading two-wheeler (2W) component manufacturers in India. It has a dominating position in the 2W casting segment with a 33 per cent market share and holds 14 per cent/22 per cent share in the 2W braking & transmission/suspension segments. We like the structural growth potential in place, coupled with scarcity premium for quality companies to play the segmental opportunities it offers,” Philip Capital said.

Endurance was established in 1985 and specialises in manufacture of aluminium die casting products. The company derives a little more than 40 per cent of revenue from this vertical. Other key business segments are manufacturing of suspension, transmission and braking products.