Sona Comstar IPO fully subscribed on Day 3

NEW DELHI: The initial public offer of Sona BLV Precision Forgings, also known as Sona Comstar, was subscribed 2.28 times on the final day of the issue.

At 5:00 pm, investors bid for 24,43,04,790 shares of the company, out of a total issue of 10,71,05,262. The company is selling its shares in the price band of Rs 285-291.

The IPO saw tepid response on the first two days from the investors, hinting that the IPO’s rich valuations proved a deterrent for some investors. The company’s IPO is roughly valued at 76 times one-year forward earnings, making it one of the most expensive issues to hit the primary market in recent times.

The demand for the issue was largely driven by qualified institutional buyers, whose allotted portion was subscribed 3.46 times on the final day. The allotted portion for retail investors was subscribed 1.57 times.

Despite the rich valuations, analysts are bullish on the counter. They said Sona BLW is a play on the electric vehicle theme. While the IPO valuation appears rich, the auto component maker is a consistent performer, they added. Most analysts recommended 'subscribe' to their clients on the IPO.

The company had raised Rs 2,500 crore from 42 anchor investors on Friday.

The issue comprises up to Rs 300 crore worth of fresh equity and an offer for sale of shares worth Rs 5,250 crore by Singapore VII Topco III Pte, an affiliate of Blackstone.