Stellar debut: Gandhar Oil lists at a 76% premium; opens at Rs 298 per share on the NSE

Gandhar Oil Limited is a leading producer of white oils, catering specifically to consumer and healthcare industries, debuted on the Indian stock market today.

Upon its debut on the BSE, the Gandhar Oil stock opened at Rs 295.40 per share, reflecting an impressive 74.79% premium compared to the issue price of Rs 169 per share from its initial public offering. Conversely, on the NSE, the stock debuted at Rs 298 per share, indicating a 76% premium. The present market capitalisation of the company stands at Rs 2891 crore.

The book-running lead managers for the IPO were ICICI Securities Limited and Nuvama Wealth Management Limited. Additionally, Link Intime India Private Limited is the issue’s registrar.

IPO Proceeds

The company intends to allocate the net proceeds from the issue for the following purposes: providing a loan to Texol to facilitate the repayment/pre-payment of a loan from the Bank of Baroda, capital expenditure involving the purchase of equipment and infrastructure for various expansion projects, fulfilling the working capital needs of the company, and supporting general corporate purposes.

Company profile

Gandhar Oil Limited stands out as a leading producer of white oils, catering specifically to consumer and healthcare industries. The company boasts an extensive portfolio comprising over 350 products, primarily categorized into three segments: personal care, healthcare, and performance oils (PHPO), and lubricants, along with process and insulating oils (PIO). These offerings are marketed under the brand name Divyol.

The company’s diverse range of products serves as essential components utilized in various end products across sectors like consumer goods, healthcare, automotive, industrial, power, tyre, and rubber. Notably, these high-quality products are preferred and employed by prominent Indian and global enterprises.

Subscription details

On November 24, 2023, the final day of the IPO window, the IPO witnessed an impressive response, especially when compared to other IPOs recently listed, with a subscription rate of 65.63 times. The public issue received mixed interest, with the retail category being subscribed 29.93 times, the QIB category achieving a subscription rate of 129.06 times, and the NII category reaching a subscription rate of 64.34 times.

The company attracted Rs 150.21 crore from various anchor investors by allocating 88.88 lakh equity shares at Rs 169 per share. The complete lock-in period for these anchor investors ends on April 3, 2024.

The IPO price range was set between Rs 160 and Rs 169, with a face value of Rs 2 per share and a lot size of 88 shares. The total size of the company’s IPO was Rs 500.69 crore, and the final share issue price was fixed at Rs 169 each.

Financial Performance:

Conclusion: 

The key dilemma for investors lies in whether to hold onto their shares. Those who applied for the IPO solely with the intention of capitalising on listing gains have already gained an impressive 76% return over its final issue price on the listing day itself. Investors who applied for the IPO 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.