The initial share sale of KSH International Ltd, a manufacturer of magnet winding wires, concluded its bidding process on Thursday without receiving full subscription from investors. The three-day initial public offering (IPO), which was open from December 16 to December 18, managed to attract bids for only 83% of the total shares on offer.
Investor Category-Wise Subscription Details
Breaking down the subscription figures reveals a mixed response from different investor classes. The portion reserved for Qualified Institutional Buyers (QIBs) was the only one to see full demand, getting subscribed 1.06 times. Retail Individual Investors (RIIs) showed moderate interest, subscribing to 86% of their allotted quota. However, the Non-Institutional Investors (NIIs) category, which includes high-net-worth individuals, displayed significant reluctance, subscribing to a mere 42% of the shares set aside for them.
What Happens Next: Allotment and Regulatory Implications
The share allotment for the KSH International IPO is scheduled to be finalised on December 19. Since the overall subscription failed to cross the crucial 90% mark mandated by the Securities and Exchange Board of India (SEBI), the company faces specific regulatory outcomes. As per guidelines, KSH International will now likely need to either extend the issue period or rely on its underwriters to step in and cover the shortfall.
The ₹710 crore public offer had a price band of ₹365 to ₹384 per share. The IPO comprised a fresh issue of equity shares worth ₹420 crore and an offer-for-sale (OFS) component of ₹290 crore by the company's promoters.
Use of Proceeds and Company Background
The capital raised from the fresh issue is earmarked for several strategic purposes. A significant portion will be used to repay existing debt. The funds will also finance the installation of new machinery to expand capacity at its Supa facility and set up additional equipment at its plant in Chakan, near Pune. Furthermore, the company plans to allocate part of the proceeds to establish a rooftop solar power plant at its Supa unit, with the remainder being used for general corporate expenses.
In a related development, the grey market premium (GMP) for the KSH International IPO has remained muted, currently standing at ₹0. This indicates that the shares are trading at par with the offer price in the unofficial grey market, reflecting a lack of significant speculative demand. The shares are expected to make their stock market debut on both the BSE and NSE on December 23.
Founded in 1981, KSH International is part of the KSH Group and started its operations in Raigad, Maharashtra. The company boasts a diverse clientele of 117 customers, including major names like Bharat Bijlee, Bharat Heavy Electricals Ltd (BHEL), Hitachi Energy India, and Siemens Energy India. It has also established a strong export footprint, sending its products to 24 countries including the USA, UAE, Germany, Saudi Arabia, and Japan.
