You are here: Home » Markets » News
Business Standard

Karda Constructions makes weak debut; ends 20% below issue price

The stock listed at Rs 136, 24% lower against issue price of Rs 180 per share, on the NSE and BSE.

SI Reporter  |  Mumbai 

Developers moving to commercial realty

(KCL) has made a weak debut on the bourses by listing at Rs 136, 24% lower against its issue price of Rs 180 per share on the National Stock Exchange (NSE) and the The stock hit a low of Rs 129 on the after its listing.

KCL, trading under ‘T’ group, ended at Rs 142, 20% lower against issue price. The T Group represents scrips which are settled on a trade-to-trade basis as a surveillance measure.

The Rs 770 million initial public offer (IPO) of company KCL was subscribed 2.53 times. Qualified institutional buyers (QIBs) category was subscribed 1.55 times, non institutional investors 3.43 times and retail investors 2 times.

KCL intends to utilize the proceeds from fresh issue towards part repayment of overdraft facilities, part repayment of term loans, general corporate purpose and to meet issue related expenses.

demand in India is expected to increase given the favorable demographics of the economy and affordable segment is likely to get boost. However the competition in this particular segment is also increasing at rapid pace. In small cites (tier 2 and tier 3) lot of regional players have become active to take benefit of the Pradhan Mantri Awas Yojana (PMAY), analyst at Choice Broking said in an note.

market in Nashik is fragmented and KCL is expected to face high competition from regional players going forward. KCL continued to keep focus in the Nashik city, it added.

Issue is aggressively priced as the company is demanding valuation of Rs 2,214 million valued at P/E of 27.6 (x) to FY17 restated EPS. players like Ganesh Housing, having presence in Ahmadabad city, is trading at P/E at 9.4 and other players at below P/E of 25. On the other hand, KCL business size is small compared to peers, the brokerage firm said.

First Published: Mon, April 02 2018. 15:45 IST