Defying market sentiment and the general slump witnessed since the beginning of the year, the Initial Public Offering (IPO) of TeamLease gave a stellar performance. The IPO was over-subscribed 66.01 times, as data available with NSE showed on Thursday.
The IPO which opened on February 2, and closed on Thursday, saw 89% subscription till the second day. The last day saw a robust demand, which led to the substantial over-subscription. The IPO generated a demand worth about Rs. 27,918 crores for the bids it received for 19,09,15,620 shares as against the total issued size of 28,92,063. The shares reserved for Qualified Institutional Buyers (QIBs) was subscribed 26.9 times, and non-institutional investor category was subscribed about 185 times. The retail investment section was subscribed 10.5 times. TeamLease had already raised Rs. 190 crore on Monday by issuing shares in a pre-IPO allotment to 15 anchor investors that included Goldman Sachs and Merrill Lynch. The shares were allotted to anchor investors at a price of Rs 850 apiece, the upper end of the band.
Investment bankers to the TeamLease IPO were upbeat on the response and said the quality of company’s business along with the financial track record led to such a massive response.“The IPO received fantastic response and showed that investors are keen to participate in good quality paper. The fact that there are no listed peers also insulated the issue. Good quality management, highest level of corporate governance, good financial performance, and no debt on its books are just some of the elements that led to such a response to the issue despite the volatile and weak market condition,” Sumit Jalan, ECM head and director-Global Market Solutions, Credit Suisse (India) was quoted saying. IDFC Securities Ltd, Credit Suisse Securities (India) Pvt. Ltd and ICICI Securities Ltd are managing the offer.
People Matters had reported last week about the concerns over high valuation of the IPO, and market concerns, considering the lacklustre performance of IPOs in 2015. The issue was valued at 41 to 44 times its 2015-16 estimated earnings, much higher than some global peers. Experts said TeamLease’s potential and business model attracted investors.
The TeamLease IPO is the second this year. It was preceded by Precision Camshafts Ltd, which was subscribed 1.89 times. It will be followed by Quick Heal Technologies Ltd, which is launching its IPO to raiseRs.450 crore next week. The performance of the TeamLease IPO has boosted prospects of companies awaiting the launch of their public issues, like, L&T Infotech, GVR Infra Projects, Infibeam and HealthCare Global to name a few.