Sotefin Bharat IPO Faces Slow Start on Day 1 as Grey Market Premium Signals 10% Upside
The maiden public issue of Kolkata-based automated car parking solutions provider, Sotefin Bharat, saw a sluggish debut on the first day of bidding. The subscription data released on July 16 indicates that the market remains cautious despite a significant premium being observed in the grey market.The Rs 90 crore initial public offering (IPO) recorded just a 22 percent subscription during its opening day. Investors bid for 7.57 lakh shares out of the total offer size of 34.32 lakh shares, which were registered through 545 applications.
Mixed Investor Participation and Institutional Silence
While retail and non-institutional investors provided a measure of support, large institutional players remained on the sidelines during the initial period. Retail investors subscribed to 37 percent of their reserved portion, while non-institutional investors contributed a 17 percent subscription.In stark contrast, qualified institutional buyers (QIBs) showed zero interest on Thursday. This lack of institutional appetite has contributed to the muted overall subscription levels despite the company's technological backing from Switzerland-based Sotefin SA.
Grey Market Strength vs Public Issue Reality
Market observers have noted a striking divergence between official bidding and unofficial market sentiment. Even with low day one subscriptions, Sotefin Bharat shares are trading at a premium of more than 10 percent in the grey market.The IPO offers 48 lakh shares with a fixed price band of Rs 178 to Rs 187 per share. The issue is scheduled to remain open for bidding until July 20, providing investors with an opportunity to gauge if demand picks up before the closing date.
Anchor Book Success and Project Pipeline
Sotefin Bharat has already secured a significant portion of its funding through the anchor book. The company raised Rs 25.58 crore by issuing 13.68 lakh shares to 15 investors on July 15, including Aidos India Fund, Getfive Opportunity Fund, and Steptrade Revolution Fund.The firm is currently executing more than 30 projects and successfully completed over 55 projects as of March 2024. This operational footprint supports the company’s position in the mechanised and automated parking solutions sector.
Strategic Use of Proceeds for Expansion
Management intends to deploy the net issue proceeds strategically to fuel growth and infrastructure development. Out of the total funds, Rs 20.12 crore is earmarked for establishing a manufacturing facility in Kolkata, while Rs 8.17 crore will be spent on acquiring new office premises.Furthermore, the company plans to allocate Rs 40 crore for working capital requirements. The remaining proceeds will be utilized for general corporate purposes. Choice Capital Advisors is serving as the merchant banker for this public issue.
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