The shortened holiday week has also shown relatively less activity from traders and investors. This and volatile markets jeopardize the success of the issue.
Avalon Technologies’ first public offering continued to meet with muted investor interest on the second day of the offering on April 5 amid difficult IPO market conditions.
The issue was only 3 percent subscribed, thanks largely to retail investors, NSE data showed at 9.45am. Investors had previously bid for 3,68,050 of the 1,14,63,854 shares to be allocated.
16 percent of the small investor quota was subscribed. For the portion reserved for non-institutional investors, 1 percent of the shares have been applied for, while no applications have been received for the qualified institutional buyers so far.
The holiday-shortened week was also marked by relatively little activity from traders and investors. This and volatile markets endanger the success of the issue.
Avalon is a contract manufacturer that competes with Amber Enterprises and Dixon Technologies. Analysts noted that the company is well diversified between end-use industries and customers with strategic manufacturing locations. Its scope of work requires complex design, engineering, component sourcing and manufacturing, creating long lead times and consequently barriers to entry.
The price range has been set at Rs 415-436 per share with a par value of Rs 2 each.
Avalon intends to raise Rs 865 crore through its initial public offering, which will include the issuance of Rs 320 crore of shares and an offer to sell shares of Rs 545 crore by promoters and other selling shareholders.
Analysts tracking the issue believe the company belongs to a high-growth industry. Additionally, some valuation comfort compared to its publicly traded peers makes Avalon Tech a cheap investment.
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