Weak debut for DCG Cables and Wires; shares plunge 5% after listing at discount on NSE Emerge platform

Bucking the trend of bumper IPO listings, small and medium enterprise (SME) DCG Cables and Wires Ltd made a weak debut on the NSE Emerge platform on Tuesday, April 16. Shares of DCG Cables and Wires were listed at a 10% discount over its issue price.

The DCG Cables and Wires opened the session at ₹90 on the NSE SME platform, which was 10% lower than the initial public offering (IPO) price of ₹100 per share.

Within minutes, the share price slipped further to hit the 5% lower circuit of ₹85.5 apiece.

Since the minimum bid size for the DCG Cables and Wires IPO was 1,200 shares for retail investors, bidders who were allotted shares in the issue would have been sitting on a loss of at least ₹17,400 (₹14.5 x 1,200) after the weak listing.

The ₹49.99-crore fixed-price DCG Cables and Wires IPO was oversubscribed nearly 17 times during the subscription period between April 8 and April 10.

The investors placed bids for over 8.05 crore shares as against 47.47 lakh shares on offer during the three-day bidding window.

The portion reserved for retail investors received subscription of around 21.7 times, while non-institutional investors’ (NII) category was overbid by 11.5 times.

The DCG Cables and Wires IPO was entirely a fresh issuance of 49.99 lakh shares of face value of ₹10 each. The total issue size included a market maker portion of 2.52 lakh shares. There was no offer-for-sale (OFS) component in the issue.

The company intends to use the net proceeds of the IPO for meeting public issue expenses, general corporate purposes, working capital requirements, and capital expenditure for building development.

DCG Cables and Wires had appointed Interactive Financial Services Ltd as the book-running lead manager, while Bigshare Services Pvt. Ltd was the registrar for the issue.

Established in 2007, DCG Cables and Wires offers an extensive range of high-quality copper products that are designed to meet the requirements of industrial and commercial applications.

The company primarily caters to transformer manufacturers across India. Its product portfolio includes copper strips, paper-covered copper strips in various shapes, and other wires.

DCG Cables and Wires owns and operates three manufacturing facilities in Gujarat’s Ahmedabad and Vadodara.

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