Alkali Metals - Mysterious Bounce

The games never end on small cap IPOs and this is not different. This could be called a mockery of public issue as only 19 shareholders were allotted 75% of the total equity size of Alkali Metals, and only 1 among them was allotted 35% of the total equity size. Closer look at the allotment details will reveal that Mavi Investment Fund was the only QIB applied for the issue and was allotted 35% of the issue. Important to mention that there is no lock-in period for Mavi Investment, Investors should remember that Mavi Investment has been active in small-cap IPOs in the past as well.

It was not a smooth sailing for Alkali Metal to gets its IPO through as the co has to extend dates and lower price band. Also, ICRA rated IPO grade 2 which suggest below average fundamentals. All these leaves bad taste in the mouth for most of the investors. Retail investors should remain away from these kind of IPOs as the gains could fizzle out with the blink of an eyes as seen in the past.

19 shareholders hold 75% of total equity issue

Mavi Investment: 9.12 lakh shares

Bodies Corporate: 10 hold 6.8 lakh shares

Individual shareholders holding shares capital excess of Rs 1 lakh shares: 8 hold 2.8 lakh shares

About Alkali Metals issue and allotment

Issue size: 25.5 lakh shares

Issue received 1,315 applications resulting in 1.02 times subscription

1 application was allotted 35% of total equity issue (hold 9% stake)

Mavi Investment Fund was allotted 35% of total equity issue

Mavi Investment Fund shares are not locked in

Mavi Investment Fund is a sub-account of M.M. Warburg Bank (SCHWEIZ) AG and has been active in small-cap IPOs

MM Warburg & CO KGaA is the 2nd largest independent private bank in Germany. The equity capital of the bank is entirely owned by private individuals.

Subscription

QIB: 1 application, subscribed 0.72 times

Non Institutional Investors: 57 applications, subscribed 3 times

Retail: 1257 applications, subscribed 0.55 times

No application from MFs

Other details of IPO

Company extended last date of issue by 5 days and reduced price band from Rs 90-105 to Rs 86-103

ICRA had assigned IPO grade 2 indicating below average fundamentals

Raised Rs 26.26 crore

By: By Varinder Bansal, CNBC-TV18

Alkali Metals: Ends with 68.35% premium

Alkali Metals closed at Rs 173. 4 on the NSE, at a huge premium of 68.35% to its issue price of Rs 103.

On the NSE, the share touched an intraday high of Rs 179 and intraday low of Rs 99. The total traded quantity was 1,06,70,652 shares and turnover was Rs 16855.36 lakh.

On the BSE, the share closed at Rs 173.15 at a premium of 68.11%. On BSE its intraday high was at Rs 179.3 and intraday low was at Rs 90. The total traded quantity was 1,03,16,125 shares

The share had listed at Rs 99 on the NSE against the issue price of Rs 103 at a discount of 3.88% whereas on the BSE the share had opened at Rs 90 at a discount of 12.62% to its issue price.

The company is in the business of manufacturing a range of fine chemicals, based on related chemistry.

The company had come out with a public issue of 25,50,000 equity shares of Rs 10 each, which was subscribed 1.03 times.

Source: Moneycontrol.com