Amba Auto Sales and Services IPO Successfully Lists on the Stock Exchange
Amba Auto Sales and Services' Maiden IPO Successfully Concludes with 1.18 Times Subscription
Amba Auto Sales and Services, a Bengaluru-based company that operates as an authorised dealer of Bajaj Auto and LG Electronics India, has successfully concluded its maiden public issue on April 29, the final day of bidding. The initial public offering (IPO) had remained undersubscribed in the previous two sessions, but managed to garner 1.18 times subscription on the final day, with investors putting in bids for 56.98 lakh equity shares in the last three days via 906 applications.
The IPO, which was launched on April 27, aimed to raise Rs 65.12 crore via the sale of 48.24 lakh shares, priced between Rs 130-135 per share. Qualified institutional buyers and non-institutional investors led the way in supporting the issue subscription, bidding 1.75 times and 1.57 times, respectively. However, the portion set aside for retail investors was undersubscribed at 70 percent.
| Investor Category | Subscription Ratio |
|---|---|
| Qualified Institutional Buyers | 1.75 times |
| Non-Institutional Investors | 1.57 times |
| Retail Investors | 0.30 times (undersubscribed) |
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The IPO share allotment will be finalised by April 30, while Amba Auto Sales shares will be available for trading on the NSE Emerge from May 5. Notably, the company's shares are not getting any premium in the grey market, despite the muted subscription numbers, according to market observers.
Amba Auto Sales plans to utilise the proceeds from the IPO to set up seven new showrooms and renovate existing ones, using Rs 6.3 crore of the funds. Additionally, Rs 43 crore will be allocated for working capital requirements, while the remaining funds will be used for general corporate purposes. The company currently operates 28 showrooms and service centers, including showrooms for Bajaj and LG, as well as service stations and a godown.
The proposed seven new showrooms will include three dedicated for 2-wheeler showrooms and four for 3-wheeler showrooms, as per the company's plans. Capitalsquare Advisors is acting as the sole merchant banker for the Amba Auto Sales and Services IPO.
Investor Takeaway
Amba Auto Sales and Services' IPO has successfully listed on the stock exchange, with a 1.18 times subscription.
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