ASK Automotive lists at a premium of 8% at Rs 305 each on the BSE

ASK Automotive Limited specialises in manufacturing Advanced Braking Systems for two-wheelers in India and debuted on the Indian stock market today.

Upon its debut on the BSE, the stock opened at Rs 304.90 per share, reflecting an 8% premium compared to the issue price of Rs 282 per share from its initial public offering. Conversely, on the NSE, the stock debuted at Rs 303.30 per share, indicating a 7.5% premium.

As of the current moment, the stock is being traded at Rs 308.80 per share on the BSE, having reached intraday highs and lows of Rs 311.50 and Rs 304.15, respectively. The present market capitalisation of the company stands at Rs 6,090 crore.

The book-running lead managers for the IPO are JM Financial, Axis Capital, ICICI Securities, and IIFL Securities Limited. Additionally, Link Intime India Private Limited serves as the registrar for the issue.

IPO Proceeds 

The company will not gain any proceeds from the offer, and all the funds generated will be directed to the selling shareholders. The distribution of the offer proceeds among the selling shareholders will be proportionate to the number of offered shares sold by each respective selling shareholder as part of the offer.

Company profile

ASK Automotive Limited specialises in manufacturing Advanced Braking Systems for two-wheelers within India. It was incorporated in 1988. Their product lineup encompasses AB systems, aluminium lightweight precision (ALP), wheel assemblies for 2W OEMs, and safety control cables (SCC), serving domestic and international markets.

By June 2023, the company had expanded to operate 15 manufacturing units across five states in India. ASK Automotive caters to Original Equipment Manufacturers such as HMSI, HMCL, Suzuki, TVS, Yamaha, Bajaj, Royal Enfield, Denso, Magneti Marelli, and others. Furthermore, it extends its offerings to the independent aftermarket and exports via its strategically located manufacturing facilities nationwide.

Subscription details

On November 9, 2023, the final day of the IPO window, the IPO witnessed an impressive response, especially compared to other recently-listed IPOs, with a subscription rate of 51.14 times. The public issue received mixed interest, with the retail category being subscribed 5.7 times, the QIB category achieving a subscription rate of 142.41 times, and the NII category reaching a subscription rate of 35.47 times.

The company attracted Rs 250.17 crore from various anchor investors by allocating 88.71 lakh equity shares at Rs 282 per share. The complete lock-in period for these anchor investors ends on March 20, 2024.

The IPO price range was set between Rs 268 and Rs 282, with a face value of Rs 10 per share and a lot size of 53 shares. The total size of the company’s IPO was Rs 834 crore, and the final share issue price was fixed at Rs 282 each.

Financial Performance

Conclusion 

The key dilemma for investors lies in whether to hold onto their shares. Those who applied for the IPO solely to capitalize on listing gains have already gained an 8% return over its final issue price on the listing day itself. Investors who applied for the IPO purely for listing gains may consider closing their positions.

Conversely, investors with a higher risk tolerance might opt to hold onto their shares for the medium to long term, as this strategy could potentially yield benefits over time.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.