New Delhi-based Annu Projects experienced a disappointing stock market debut on Wednesday, September 2, as its shares listed at a significant discount. The engineering, procurement, and construction (EPC) solutions provider began trading on the National Stock Exchange (NSE) at Rs 72, marking a steep 27.27% discount from its issue price of Rs 99 per share. Similarly, on BSE Ltd., the stock settled at Rs 75, a 24.24% discount.
This poor performance meant investors faced a loss of Rs 4,077 on each lot of shares allotted to them. The listing was considerably below market expectations, especially after grey market activity had suggested a more moderate 7-8% weakness.
Annu Projects: Company Background
Annu Projects specializes in the design, development, implementation, operation, and maintenance of critical overhead and underground utility infrastructure. Its work spans across various verticals including telecom infrastructure, sewerage infrastructure, and gas pipeline development.
IPO Details and Investor Response
The initial public offering (IPO) for Annu Projects was open for bidding between August 25 and August 28. The company successfully raised Rs 175 crore through a fresh issue of 1,76,83,000 equity shares. Shares were offered in a price band of Rs 94-99 apiece, with a lot size of 151 equity shares.
During the bidding process, the IPO was subscribed 2.93 times, attracting bids worth Rs 513.26 crore from 1.42 lakh applications. Qualified institutional bidders (QIBs) subscribed 1.72 times their allocated portion, non-institutional investors' quota was booked 3.55 times, and the retail portion saw a subscription of 2.68 times.
Brokerage Concerns
Brokerage firms had offered mixed views on the Annu Projects IPO, citing several key risks. Primary concerns included the company's cash flows, its reliance on government contracts, and a high degree of customer concentration. Mefcom Capital Markets served as the sole book-running lead manager for the IPO, with Kfin Technologies Ltd. acting as the registrar for the issue.