MVK Agro Food shares off to a poor start, list at 34% discount
Upstox
2 min read • Updated: March 7, 2024, 1:25 PM
Summary
MVK Agro Food Product IPO was priced at ₹120 per share, with a lot size of 1,200 shares. Given the listing on Thursday, investors, who were allotted shares in the IPO, were sitting on a loss of at least ₹49,200 (₹41 x 1,200) as soon as trading began in the stock.
Shares of small and medium enterprise (SME) MVK Agro Food Product Ltd made a lacklustre trading debut on Thursday, March 7, with the stock listing at an over 34% discount on the NSE Emerge platform.
MVK Agro Food Product shares opened the session at ₹79 apiece, which was 34.2% lower than its initial public offering price (IPO) price of ₹120 per share. However, just within minutes after opening for trade, the stock gained 5% to hit ₹82.95 level.
The fixed-price MVK Agro Food Product IPO was priced at ₹120 per share, with a lot size of 1,200 shares. Given the listing on Thursday, investors, who were allotted shares in the IPO, were sitting on a loss of at least ₹49,200 (₹41 x 1,200) as soon as trading began in the stock.
This may come as a rude shock to investors as a vast majority of the new shares in the market have listed at a premium in the past few weeks.
The MVK Agro Food Product IPO had seen decent subscription during the three-day bidding between February 28 and March 3, getting oversubscribed across all investor categories.
The issue was oversubscribed by over 8.5 times, with the retail quota being overbid 13 times and the non-institutional investor (NII) portion seeing a subscription of 3.9 times.
The IPO was entirely a fresh issuance of 54.9 lakh shares of face value of ₹10 each, with no offer for sale (OFS) component.
MVK Agro Food Product had informed that the net proceeds from the IPO would be utilised for setting up a greenfield unit in Nanded, Maharashtra. Funds would also be used for manufacturing ethanol and the generation and bottling of bio-CNG and fertiliser, as well as for general corporate expenses.
Incorporated in February 2018, MVK Agro Food Product is an integrated sugar and other allied products manufacturing company operating from Nanded district in Maharashtra.
It operates a single-location sugar unit having a licensed crushing capacity of 2,500 TCD (tonnes of cane per day). In addition to sugar, it also commercialises and sells its by-products and waste products like molasses, bagasse and pressmud. MVK Agro Food Product is also engaged in the generation of power for captive consumption.