Garden Reach has poor listing

Garden Reach Shipbuilders had seen a very poor response to its IPO. In fact the response was so poor, it has to lower its price band to Rs. 114 to Rs. 118 (from 115-118 earlier) and the issue closing date was also extended.

It thus managed to get the issue fully subscribed at 1.02 times and this was thanks to qualified institutional investors whose reserved portion was subscribed 1.81 times.

As expected, the stock got listed at a discount – at Rs.104 on the BSE v/s IPO price of Rs.118.

In our IPO Analysis, we had concluded, “Shaky financials and lack of near term triggers do not provide comfort on the stock. Neither are the valuations too supportive. Given utterly bearish secondary market sentiments, particularly for PSU stocks, better to avoid this IPO.”