Manpasand Beverages IPO subscribed 1.4 times

IPO gets muted response from non institutional investors

The initial public offer (IPO) of Manpasand Beverages received bids for a total of 1.05 crore shares. The issue which closed yesterday, 26 June 2015, was subscribed 1.4 times. Post the allotment of shares to anchor investors, remaining 75.86 lakh shares were on offer through the book building route. The price band for the IPO was set at Rs 290 to Rs 320 per share.

Category-wise subscription data showed that the Qualified Institutional Buyers (QIBs) portion of the IPO was subscribed almost 2 times. Within the QIB category, foreign institutional investors (FIIs) put in bids for a total of 37.09 lakh shares and mutual funds put in bids for a total of 45.03 lakh shares. A total of 41.37 lakh shares were reserved for allotment for QIBs.

There was a muted response for the IPO from the non institutional investors (NII) category. The NII portion was subscribed just 38%. The retail investors portion of the IPO was subscribed 1.16 times.

On 23 June 2015, Manpasand Beverages allotted 56.25 lakh equity shares to anchor investors aggregating to Rs 180 crore. The shares were allotted to the anchor investors at Rs 320 per share, the top end of the Rs 290-320 per share price band for the IPO.

Manpasand Beverages, promoted by Dhirendra Singh, is a fruit drink manufacturer focusing on mango. Mango-based fruit drink, Mango Sip, is the flagship brand of the company, which is strategically aimed at customers in semi urban and rural markets. In addition, the company also sells fruit drink in apple flavor under the brand Apple Sip.

The funds raised from the IPO will be utilised to set up new manufacturing facility in Haryana at a cost of Rs 153 crore. Commercial production is expected to commence by January 2017. Modernizing existing manufacturing facilities at Vadodara and Varanasi facility will amount to Rs 38.90 crore. A new corporate office in Vadodara will cost Rs 22.14 crore. Certain borrowings amounting at Rs 100.9 crore will be repaid. Remaining funds will be used for general corporate proposes.

Manpasand Beverages reported net profit of Rs 12.64 crore on net sales of Rs 239.10 crore for nine months ended 31 December 2014. The company's business is seasonal in nature, with Q1 and Q4 contributing 60-65% of sales. The company's net profit declined 8.35% to Rs 20.50 crore on 22.5% growth in net sales to Rs 294.31 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).

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