Shankara Building soars 38% on debut

The stock closed at Rs 632.8 on the BSE, up Rs 172.8 over the issue price of Rs 460

Home improvement and building products company Shankara Building Products made a stellar trading debut on Wednesday. Shares of the company closed 38 per cent above its Initial Public Offer (IPO) price.

The stock closed at Rs 632.8 on the BSE, up Rs 172.8 or 37.57 per cent over the issue price of Rs 460.

Market participants said the positive response for Shankara on the listing day was on the expected lines given the high investor demand witnessed during the IPO. The Rs 345-crore offering of Shankara was subscribed more than 40 times.

IDFC Bank, Equirius Capital and HDFC Bank were the book running managers for the issue.

The IPO comprised of Rs 300 crore worth secondary share sale by multiple investors, including private equity (PE) player Fairwinds. There was also a fresh issue worth Rs 45 crore in the IPO, which was to be used for repayment of loans

The company raised Rs 103 crore by allotting shares to anchor investors. List of institutions that are part of the anchor book include Singapore-based Flowering Tree Investment Management, Nomura Singapore HSBC Global Investment Fund and Franklin India.

Shankara operates in the building materials space and has 103 stores across India. The company registered a net profit of Rs 41.3 crore on back of net sales to a tune of Rs 2,035.9 crore.

Several brokerages had given a buy call on Shankara during the IPO. According to Angel Broking, the company is expected to witness higher revenues from its retail business as it has a strong presence in the space along with diversified product offering.