Shares of ASK Automotive continued gaining streak for the second straight session on Thursday, a day after making positive debut on the domestic bourses, as investors’ sentiment got a boost after Goldman Sachs India bought stake in the Gurugram-based company. The stock of the auto ancillary firm has risen as much as 13.4% in two sessions against its initial public offering (IPO) price of ₹282 per share.
Early today, ASK Automotive shares opened 2.6% higher at ₹318.35 against the previous closing price of ₹310.20 on the BSE. Extending opening gains, the counter rose 3.1% to hit an intraday high of 319.90, while the market capitalisation rose to ₹6,260 crore.
The shares of ASK Automotive surged today after Goldman Sachs India Equity Portfolio purchased 23.2 lakh equity shares, or 1.18% of paid-up equity, of the company through an open market transaction. The share were bought at an average price of ₹310.05 a share, amounting to ₹71.95 crore.
On November 15, ASK Automotive listed at ₹304.9 on the BSE, a premium of 8.1% over its issue price of ₹282 apiece. On the NSE, the stock opened at ₹303.3, up 7.55% over the IPO price.
The positive listing of ASK was broadly in line with Street expectations as the ₹834-crore IPO received an overwhelming response from investors. Shivani Nyati, Head of Wealth, Swastika Investmart, says, “The IPO is coming at a PE valuation of 45.63x, which is reasonably priced. So, allottees who applied for the public offering for listing premium are advised to maintain their stop loss at ₹290 and wait for further upside, whereas those who have a medium- to long-term perspective can also hold the stock with the given stop loss.”
The IPO, which was completely an OFS by promoters Kuldip Singh Rathee and his wife, Vijay Rathee, was booked 35.47 times, with qualified institutional buyers (QIB) portion receiving 142.4 times bids. The portion set aside 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.
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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