ASK Automotive shares list at 8% premium over IPO price

Auto ancillary firm ASK Automotive kicked-off trading on the domestic stock exchange with a 8.1% premium over its initial public offering (IPO) price. The share price of the ASK Automotive listed at ₹304.9 on the BSE, against its issue price of ₹282 apiece. On the NSE, the stock opened at ₹303.3, up 7.55% over the IPO price.

Post listing, the share price of ASK Automotive gained as much as 10.5% to ₹311.75, while the market capitalisation climbed to ₹6,114.4 crore.

The listing of ASK was broadly in line with Street estimates as the stock was available at a premium of ₹28 in grey market today, indicating listing price to be around ₹310 ( ₹282 + ₹28) per share levels.

According to market analysts, ASK has strong fundamentals, but higher valuations and 100% offer for sale (OFS) limited the listing gains.

The ₹834-crore IPO of ASK Automotive, which was completely an OFS by promoters Kuldip Singh Rathee and his wife, Vijay Rathee, received overwhelming response from investors, particularly institutional buyers. The offer received bids for 105.85 crore shares against the issue size of 2.06 crore shares.

The portion reserved for qualified institutional buyers (QIB) was booked 142.4 times, while quota for non-institutional investors (NII) and retail investors were subscribed 35.5% and 5.7 times, respectively. The company had reserved up to half of the public issue size for QIBs, 15% for NIIs, and the remaining 35% for retail investors, as per the document filed with the SEBI.

ASK had set the IPO price band at ₹268-282 per share and the lot size was 53 equity shares and in multiples thereafter. The minimum application amount for retail investors was ₹14,946 for 1 lot, and a maximum of ₹194,298 for 13 lots.

Ahead of the IPO, ASK raised ₹250.2 crore from anchor investors by allotting 88,71,416 equity shares to 25 anchor investors, including 6 mutual funds, at ₹282 per share. The marquee anchor investor who participated in the anchor book included  Morgan Stanley, Copthall Mauritius, Goldman Sachs, Societe General, BNP Paribas, LC Radiance Fund, Integrated Core Strategies, Turnaround Opportunities Fund, Bajaj Allianz, Abakkus, Edelweiss, 3P India, Canara Rebeco, ICICI Prudential Life, Tata Mutual Fund, Florida Retirement, Neuberger Bermann, NHIT Global, SBI Life, Nippon Life India, etc.

Established in 1988, ASK Automotive claims to be the largest manufacturer of brake-shoe and advanced braking systems for two-wheelers in India. The company’s product range includes AB systems, aluminium lightweight precision, wheel assembly for two-wheelers, and safety control cables. As of June 2023, the company has 15 manufacturing units spread across five states in India.

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