Shares of Prince Pipes and Fittings Ltd made a tepid market debut today and listed at Rs 160, a 10 per cent discount against its issue price of Rs 178 per share on the BSE. The stock ended the session at Rs 166.60.
During the day, the stock hit an intra-day low of Rs 152.60 and an intra-day high as Rs 177.95 per share on the exchange. A total of 2.3 crore shares changed hands on the NSE and the BSE combined.
The initial public offer of Prince Pipes and Fittings was subscribed 2.21 times from December 18 to 20. The Rs 500-crore offer received bids for 4.37 crore shares against the total offer size of 1.97 crore shares, as per the NSE data.
Qualified institutional buyers (QIBs) category was subscribed 3.54 times, non institutional investors 1.21 times and retail individual investors 1.89 times.
Prince Pipes has manufacturing facilities in Dadra and Nagar Haveli, Uttarakhand, Maharashtra, Tamil Nadu and Rajasthan.
At Rs 178, the company is fairly valued at 23x PE on FY19 EPS of Rs 7.6, IDBI Capital said in an IPO note. "We recommend subscribing to this issue, considering healthy sales growth driven by higher volume and improvement in net profitability driven by lower interest outgo, which strengthens its near term growth prospects," the brokerage added.
Santosh Meena, Senior Analyst at TradingBells notes that the company's peers Astral Poly Technik is trading at PE of 70x, while Finolex Industries is trading at PE of 20x. The average PE of the industry, according to them, is around 40x. "Prince pipes IPO is fairly priced. It is pure play of infra and real estate sector. Looking at the growth opportunities in India for this sector, one can subscribe to the issue," Meena added.