Danish Power makes stellar debut, list at 50% premium on the NSE SME platform; check details

Danish Power Ltd, a small and medium enterprise (SME) engaged in the business of manufacturing power equipment, made a solid trading debut on Tuesday, October 29, with its stock listing at a 50% premium on the NSE SME platform.

Danish Power shares opened the session at ₹570 apiece compared to their initial public offering (IPO) price of ₹380 apiece. However, within minutes of the opening of trade, the stock price hit the 5% lower circuit at ₹541.5 per share.

As the minimum bid quantity to apply for the Danish Power IPO was 300 shares, successful bidders who were allotted shares in the primary issue would have been sitting on listing gains of ₹57,000 (₹190 x 300) per lot as soon as the stock started trading on exchanges.

In the initial 10 minutes of trade, more than 16.29 lakh shares of the company changed hands on the NSE Emerge platform. The trading value stood at ₹91.7 crore, and the company’s market capitalisation reached ₹1,066.3 crore.

Danish Power IPO details

The ₹197.90-crore Danish Power IPO was open for bidding between October 22 and October 24. The offer was oversubscribed by almost 127 times during the three-day bidding period, with the company receiving bids for a total of 44.11 crore shares compared with 34.83 lakh shares on offer.

The non-institutional investors’ (NIIs) category was the most subscribed at almost 276 times. The portion reserved for retail investors was overbooked by 80 times, while the qualified institutional buyers’ (QIBs) segment was booked around 105 times.

Danish Power IPO was a 100% book-built issue consisting entirely of fresh issuance of 52.08 lakh shares, with no offer-for-sale (OFS) component.

The price band for the NSE SME issue was fixed at ₹360 to ₹380 per share, with a lot size of 300 shares, or the minimum bid quantity.

Ahead of the IPO's launch, Danish Power also raised ₹55.63 crore through its anchor investor round. The company's board of directors, at its meeting held on October 21, finalised the allocation of 14.64 lakh shares to 19 anchor investors at an allocation price of ₹380 per share.

The company had earlier declared that the net proceeds from the fresh issuance are proposed to be used to fund capital expenditures for expanding the company's manufacturing facility by building a factory shed and installing additional plant and machinery therein.

A portion of the funds would also be used to meet working capital requirements, repay specific borrowing the company availed of, in part or full, and for general corporate purposes.

Founded in July 1985, Danish Power is recognised as one of the leading power equipment manufacturers and exporters from India.

About the company

The company manufactures various types of transformers, including inverter duty transformers for use in renewable power projects such as solar power plants and wind farms. It also produces oil and dry-type power and distribution transformers control relay panels and offers substation automation services.