Zetwerk has fixed the share price band for its Rs 5,012 crore IPO at Rs 143 – 151. The Zetwerk IPO will open for public bidding on October 15. The issue comprises a fresh component of Rs 2,830 crore, and investors will offload Rs 2,182 crore worth of equity.
The Bengaluru-based firm is expected to list on stock exchanges on October 23. Eligible employees who participate in the bidding process are entitled to a discount of Rs 14 per share. Here are five major things you should know about the Zetwerk IPO
Of the total float, Zetwerk aims to raise Rs 2,830 crore via the issuance of 18.72 crore fresh equity shares of Rs 1 each. Investors will offload 14.45 crore shares amounting to Rs 2,182.33 crore through the offer for sale route.
The total offer size stands at Rs 5,012.33 crore. Kotak Mahindra Capital, Morgan Stanley India, Avendus Capital, JM Financial, HSBC Securities, and Pantomath Capital Advisors are the merchant bankers for the issue, while KFin Technologies is acting as its registrar.
A retail applicant can bid for a minimum of one lot comprising 99 shares, amounting to an investment of Rs 14,949, while the maximum they can apply for is 13 lots. Small-high net worth individuals can bid for a minimum of 14 and a maximum of 66 lots. The lower cap for Big-HNI is 67 lots, translating to an investment of Rs 10,01,583.
Currently, shares of Zetwerk are trading in the unlisted markets at a grey market premium of Rs 20 or 13%, reflecting a listing price of Rs 171, based on the upper end of the share price band. This translates into gains of Rs 1,980 per lot.
However, readers must know that GMP does not guarantee profit or loss and fluctuates based on market conditions.
Of the total fresh proceeds, Zetwerk plans to deploy capital worth Rs 1,300 crore towards the repayment of the borrowing availed by the company. According to its red herring prospectus, the firm will utilise Rs 860 crore for paying off the debt availed by certain subsidiaries.
The remaining amount is expected to be diverted towards funding its inorganic growth and other general corporate purposes.
Risks associated with recurring losses, reliance on third-party manufacturers for raw material supply, exposure to price volatility, and heavy dependence on revenue from Indian operations need monitoring.
Additional high reliance on top ten clients for revenue generation, failure to meet customer specifications, possible shutdowns of manufacturing facilities, pricing pressure from customers, and counterparty credit risk may affect the company’s cash flow and business operations.
The issue will open for public subscription on October 15 and close its bidding window on October 19. Anchor bidding will take place on October 14. Share allotment is expected to be finalised by October 21.
On a tentative basis, beneficiaries shall be credited their shares and receive the requisite refunds by October 22. Zetwerk is expected to list on the BSE and NSE on October 23.