IPO updates: Signature Global lists at 15.5% premium; Sai Silks opens 4% higher

The shares of realty firm Signature Global and ethnic apparel retailer Sai Silks Kalamandir made debut on the stock exchanges today. Despite weak market sentiments, shares of Signature Global listed at a premium of 15.5% over the issue price, while Sai Silks stocks opened 4.1% higher over the IPO price. Both the listings were in line with expectations as per trends in the grey market,  an unofficial market where shares can be bought and sold before they are listed on a stock exchange.

Shares of real estate developer Signature Global (India) were listed at ₹444 apiece on the NSE, up 15.5% over the issue price of ₹385. On the BSE, the stock opened at ₹444 per share. Post listing, the realty stock gained as much 17.4% to hit a high of ₹453, while the market capitalisation climbed to ₹6,294 crore.

Meanwhile, Sai Silks shares listed at ₹231 apiece on the NSE, a premium of 4.1% over the issue price of ₹222. In a similar trend, the stock debuted at ₹230.1 per share on the BSE. Post listing, the stock hit a high of ₹238.85 on the BSE and ₹239.65 on the NSE, while the market capitalisation rose to ₹3,667 crore.

“The listing of Signature Global was in line with expectations, given the good response that the IPO received. Signature Global is a leading real estate developer in Delhi-NCR, but it has a history of losses and faces concentration risk and stiff competition from other developers. After this listing, investors should consider booking profit; however, those who want to hold it should maintain a stop loss at 400,” says Shivani Nyati, Head of Wealth, Swastika Investmart.

On Sai Silk’s listing, Nyati says, “In the long term, the company has the potential to grow its business, given its strong brand presence, expanding footprint, and focus on online sales. However, investors should be aware of the risks associated with the company, such as the competitive nature of the industry and the impact of economic downturns on consumer spending. Thus, cautious investors may consider exiting their position, but investors with a long-term view may hold it by keeping a stop loss.”

The ₹730 crore initial public offering (IPO) of Signature Global, which included ₹603 crore via the fresh issue of equity shares and offer for sale (OFS) of shares worth ₹127 crore, opened for subscription on September 20 and closed on September 22. Ahead of the IPO, the company raised ₹318.5 crore from anchor investors, including Nomura.

The IPO was subscribed 11.88 times, led by non-institutional investors (NII) as the portion reserved for them was booked 13.54 times. The retail investors' quota was subscribed 6.82 times and the qualified institutional buyers (QIB) segment was booked 12.71 times.

The International Finance Corporation-backed company intends to use the capital raised from the fresh share sales to repay debts and utilise for inorganic growth through land acquisitions as well as to meet general corporate purposes. The real estate firm will use nearly two-thirds of the capital for repayment of debts, amounting to ₹432 crore. As of June 2023, the outstanding loans of the company stood at ₹495.26 crore and its four subsidiaries at ₹123.86 crore.

On the other hand, the ₹1,201-crore IPO of Sai Silks Kalamandir was subscribed 4.40 times, which opened for subscription on September 20, and closed on September 22. Besides, it raised ₹360.30 crore from anchor investors such as Whiteoak Capital, Abakkus, Citigroup Global, SBI MF, ICICI Prudential MF, HDFC MF, Kotak MF, HSBC MF, Aditya Birla Sunlife MF, and UTI MF.

The IPO of Sai Silks received strong response from QIBs as the quote for them was booked 12.35 times. The NIIs portion was subscribed 2.47 times, and retail investors quota was booked 0.88 times.

The retailer of ethnic apparel, particularly sarees in south India, intends to use the IPO proceeds to finance capital expenditures for the establishment of 30 additional stores and two warehouses, as well as for working capital needs, debt repayment, and general corporate purposes. It has a network of 54 stores in Andhra Pradesh, Telangana, Karnataka and Tamil Nadu.

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