The Rs 300-crore Antony Waste Handling Cell initial public offer (IPO) has been subscribed 9 times so far on the final day of the three-day bidding process. Retail investors have bid for their portion of the issue 14.61 times while Qualified Institutional Buyers (QIBs) have subscribed 4.14 times and Non-Institutional Investors 2.47 times of their respective quotas. Overall the issue has received bids for 6 crore equity shares against the 66.66 lakh shares on offer. The solid waste management company has come up with its public issue for the second time this year. It launched the Rs 200-crore IPO in March this year, which was withdrawn as investors were pulling off their money from equities due to coronavirus. Antony Waste was the first IPO to go unsubscribed during that time, owing to a tepid response from the investors.
Also read: Antony Waste Handling grey market premium falls amid share market volatility; what to expect on listing day?
‘Investors with very high-risk appetite should subscribe’
Gaurav Garg, Head of Research, CapitalVia Global Research, told The Outlooker Online that looking at subscription in Antony Waste Handling Cell, 10 per cent premium can be expected, however grey market premium (GMP) recently dropped significantly as it crashed from 150 to 40. “Given the company’s over-dependence on municipal authorities for a large chunk of their revenue, only investors with a very high-risk appetite should subscribe for it,” Garg advised.
Indian share markets were scaling fresh record highs till the first half of Monday’s session. However, with the news of the new strains of the coronavirus reported in the UK, share markets tumbled sharply from the highs. Antony Waste IPO opened on Monday and within two hours, it subscribed 58 per cent. As bears took the charge on D-Street, Antony Waste IPO was subscribed just 2 times at the end of day one of the bidding process.
Antony Waste grey market premium falls further
Indian share market volatility has hit the Antony Waste Handling Cell grey market premium too. Antony Waste shares were seen trading at Rs 343, an 8 per cent or Rs 28 premium over the issue price of Rs 315 apiece. Yesterday, the solid waste management company was quoting a premium of Rs 60 or 19 per cent. It may be noted that Antony Waste was commanding a premium of Rs 190 to trade at Rs 505 apiece on Sunday. With a fall in Indian share markets on Monday, grey market premium fell too.
Pavitra Shetty, Independent Analyst/ Co-Founder and Trainer, Tips2Trade, told The Outlooker Online that even though the indices have mildly corrected from their all time highs, Antony Waste Handling Cell should see decent listing gains. “Strong fundamentals with severe entry barriers make it a decent long term hold. Investors who will receive allotted shares should remain patient and not get swayed by short term volatility,” Shetty added.
Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd, doesn’t expect Antony Waste to get strong demand like the last few IPO such as Burger King India, Mrs Bectors Food Specialities, etc. He added that the inherent risk in the business model such as business is dependent on municipal authorities for a substantial proportion of the revenue can not be ignored. Business is dependent on a limited number of customers for a significant portion of the revenue. It has a valuation of P/E of 11.5x on FY20 basis (at the upper price band).