GMM Pfaudler tumbles as OFS floor price set at steep discount

GMM Pfaudler hit a lower circuit of 10% at Rs 4717 after the company kicked off an offer for sale (OFS) by the promoters at a floor price of Rs 3,500 per share.

Through the OFS, the company's promoters proposes to sell over 25.71 lakh equity shares, constituting approximately 17.59% paid-up share capital of the company. The company has an option to sell an additional 15.21 lakh equity shares or 10.41% stake via OFS (oversubscription option). In event the oversubscription option is exercised, the offer will collectively represent approximately 28% of the total paid up equity share capital.

The promoters held 1.09 crore shares or 75% stake in the company as on 30 June 2020.

The floor price for the OFS was set at Rs 3500 a piece, at a 33.22% discount to GMM's closing price of Rs 5241.10 on Monday.

The OFS opened on Tuesday (22 September 2020) for non-retail investors, while both retail as well as non-retail investors will be able to subscribe on Wednesday (23 September 2020). A total of 10% of the offer size, aggregating to over 2.57 lakh shares, has been reserved for retail investors.

As on 09:55 IST, the OFS received subscription for 1866 shares or 0.08% against the base non-retail offer size of 23.14 lakh shares.

GMM Pfaudler is a supplier of process equipment to the pharmaceutical and chemical industries. The company has a diversified product portfolio which includes mixing systems, filtration & drying equipment, engineered systems and heavy engineering equipment.

The company reported 8.5% rise in consolidated net profit to Rs 19.19 crore on 2.8% increase in net sales to Rs 154.43 crore in Q1 June 2020 over Q1 June 2019. EBITDA margin fell to 17.8% as on 30 June 2020 from 18.4% as on 30 June 2019.

In the past one year, the stock has surged 210.35% while the benchmark S&P BSE Sensex shed 0.97% during the same period.

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