Sai Silks IPO fails to impress; gets 87% subscription

The company, primarily in the women’s ethnic wear business, was aiming to garner Rs 89 crore through the sale of shares in the price band of Rs 70-75 apiece

The Rs 89-crore initial public offering (IPO) of apparel retailer Sai Silks (Kalamandir) has received tepid response from investors and was subscribed 87 per cent on the last day of the issue on Wednesday.

The company received bids for 11 million shares against an offer of 12.7 million scrips, translating into 87 per cent subscription till 1700 hrs on Wednesday, according to data available on the National Stock Exchange.

Sai Silks, primarily in the women’s ethnic wear business, was aiming to garner Rs 89 crore through the sale of shares in the price band of Rs 70-75 apiece. The three-day issue closed on Wednesday.

At the lower end of the price band, Sai Silks got a total subscription of Rs 78 crore.

The proceeds from the share sale would be utilised for setting up retail outlets, brand promotion activities, term loan repayment and meeting working capital requirements.

The shares are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange. The company would offer a “safety net” scheme to its prospective retail investors for six months after the close of the issue.

Under the safety net scheme, if the market value of the shares falls below the issue price at any time during the scheme period, promoters would buy back shares at the sale price from the original allottees. However, the buyback would be subject to a maximum of 1,000 equity shares per allottee.