Mazagon to see gains, UTI may be tepid on listing day
Mumbai: Mazgaon Dock Shipbuilders and UTI Asset Management Company are set to make their debut on the stock market on Monday.
While Mazagon could list at a premium to the initial public offer (IPO) price, analysts are expected UTI’s listing to be tepid.
Price trends in the unofficial grey market indicate a listing premium of around Rs 110-Rs 120 for Mazgaon over its IPO price of Rs 145 per share. UTI could list at 5-7 discount to its IPO price of Rs 554 per share.
“Mazgaon Dock was priced attractively. On all historical parameters and compared to peers, the IPO was priced at a lower end so there is scope for improvement even after the listing pop,” said Geetanjali Kedia, senior research analyst at SPTulsian.com. “UTI, despite the AUM growth, will see challenges on the profitability growth front because their AUM mix is very adverse versus the industry,” said Kedia.
Even at a premium listing of over 100, the Mazgaon Dock IPO won’t make money for HNIs whose costing after taking funding from brokerages comes up to Rs 160. It would have to list at Rs 305 or above for HNIs to make a profit on their bet.
The Rs 444-crore IPO of Mazgaon Dock had received a strong response from investors with the issue being subscribed 157.4 times. The Rs 2,160-crore IPO of UTI AMC got subscribed 2.3 times, the lowest overall subscription among IPOs this year. The HNI portion for Mazgaon Dock IPO was subscribed close to 679 times while QIB and retail portion were subscribed 89.7 times and 35.6 times respectively.
UTI AMC’s HNI portion was not subscribed fully (93 per cent) while QIB and retail portions were subscribed 3.3 times and 2.3 times respectively. “I do not expect UTI to list at a premium. It was not very cheap at the IPO price. The best-case scenario would be listing at par,” said Kush Katakia, founder of Beanstalk Advisory.