Parag Milk IPO sails through

Company received 1.15 times subscription in qualified institutional buyer segment

Maharashtra-based Parag Milk Foods managed to successfully close its Initial Public Offering (IPO) of shares on Wednesday. The company received 1.15 times subscription in the qualified institutional buyer (QIB) segment. Parag Milk's Rs 750-crore IPO was forced to cut the issue price and extend closing by three days as it had not garnered the full QIB participation.

The dairy products firm has lowered its price band to Rs 215-227 a share from the earlier band of Rs 220-227 a share.

Overall, the IPO was subscribed 1.83 times. Retail (small investor) portion was subscribed two times and high networth individual (HNI, or the super-rich investor) segment was subscribed 3.1 times.

As Parag Milk didn't meet Securities and Exchange Board of India (Sebi)'s profit criterion, its IPO was a QIB-backed issue. According to Sebi norms, if a company doesn't have a track record of profits, it should get at least 75 per cent of QIB participation as opposed to 50 per cent in normal IPOs. Also, small-investor participation in such IPOs is restricted to only 10 per cent against 35 per cent in normal IPOs.

"During the extended period up to Wednesday, the public issue witnessed additional participation from QIBs and investors in other categories who could not invest earlier due to regional holidays in Asia," said Devendra Shah, chairman and founder, Parag Milk.