Polycab IPO over subscribed by 51.77 times on last day of issue - What investors should know

Polycab IPO: Polycab India which is a wire and cable manufacturer, on Tuesday finished its initial public offering. On the final day,  the IPO got over subscribed by 51.77 times. The company had received bids of some 91,31,19,264 equity shares across exchanges, compared to its initial public offering (IPO) size of 1,76,37,777 shares. The IPO had commenced from April 5 2019 and ending on April 9 2019.

Price band for the IPO was set at lower end of Rs 533 per piece and higher end of Rs 538 per piece. There was also Rs 53 per equity discount available for employee investors. 

The maximum subscription amount for retail investors was Rs 2,00,000.  

Book running lead managers (BRLM) were companies like Kotak Mahindra Capital Company Limited, Axis Capital Limited, Citigroup Global Markets India Private Limited, Edelweiss Financial Services Limited, IIFL Holdings Limited and YES Securities (India) Limited of the issue. Meanwhile,  ICICI bank was the sponsoring bank for the bidding. 

The company had planned to raise about Rs 1,345 crore from this IPO. Proceeds of the issue will be utilized by Polycab for repayment of all or a part of certain borrowings availed by company; fund incremental working capital requirements of the company and General corporate purposes.

During the IPO issue, Anand Rathi had stated that Polycab is a stock to invest in considering several positive factors such as market leadership position, diverse portfolio, strong distribution network and favorable macro scenario. Moreover, stating on the financial face of Polycab, Anand Rathi mentions that Polycab had a total revenue grow at a CAGR of 10% for the last three years. For FY16, FY17, and FY18, EBITDA margin was 10.01%, 9.96% and 11.74% respectively, PAT margin was 3.53%, 4.18% and 5.42%respectively. The debt-equity ratio currently stands at 0.23.

Polycab India Limited (Polycab), is one of the leading players in the electrical products industry which is engaged in manufacturing and selling of wires, cables and fast moving electrical goods (FMEG). The company produces a diverse range of electrical products which include power cables, control cables, instrumentation cables, solar cables, building wires, flexible cables, communication cables and others such as welding cables, submersible flat and railway signaling cables.