Two IPOs that opened on the same day list today after very different investor demand. BLS Polymers was subscribed almost 240 times, while SFC Environmental drew about 9 times. The difference reflects what investors are looking for in new listings right now.
Two mainboard IPOs list on the NSE and BSE today.
BLS Polymers raised ₹255 crore entirely through new shares at ₹150 each. The money will fund expansion of its Goa manufacturing plant and working capital. The company makes specialised polymer compounds used in wires, cables and underground pipelines, for customers in power, telecom, railways and oil and gas. The issue was subscribed 239.60 times.
SFC Environmental Technologies raised ₹667.53 crore at ₹330 a share, through a fresh issue of 45.45 lakh shares and an offer for sale of 1.57 crore shares by existing shareholders. It is a wastewater treatment company. The issue was subscribed 9.25 times, and was below full subscription until late on the final day, when institutional investors bid.
Several factors explain the gap in demand
Fresh issue versus offer for sale. All of BLS Polymers’ issue is new capital that goes into the business. Most of SFC’s issue is an offer for sale, with money going to existing shareholders. This season, as EAAA’s very slow start showed, investors have been cautious about offers for sale.
Issue size. BLS raised ₹255 crore. SFC raised more than two and a half times as much. Small issues are easier to oversubscribe, because a limited number of shares meets a lot of demand. That also tends to produce larger listing gains.
Sector exposure. BLS supplies compounds for cables, which ties it to the current boom in power transmission, electrification and data centre wiring. Cable makers such as KEI and Havells have reported 38–48% growth in their cable businesses this season. Investors are attracted to anything connected to that theme.
Grey market
Before the IPOs opened, BLS Polymers’ grey market premium was about ₹37, roughly 25% above the issue price. SFC’s was about ₹38 on a ₹330 price, about 11–12%. With BLS’s subscription rising to 240 times, its grey market premium has probably increased.
That said, the grey market has been a poor guide lately. EAAA’s last GMP pointed to a 3.4% gain, and the stock listed only 0.6% higher on Monday. Very high subscription often produces a strong opening, but it can also lead to heavy selling by allottees who want to take quick profits.
What allottees can expect
With 240 times subscription, very few retail applicants received BLS Polymers shares. Those who did may see a strong listing. SFC allottees will likely get a smaller gain, if any, as the subscription and grey market both suggest.
The market backdrop is helpful. The Sensex is at a two-month high after three days of gains. But today is also the US election, and any sharp market move could affect listing-day trading.
Small issues raising money for growth in sectors such as power, defence and infrastructure are attracting very strong demand. Larger offers for sale are struggling. If BLS lists strongly and SFC lists flat, it will reinforce what companies preparing IPOs already know: fresh capital and a strong sector story drive demand.
This story will be updated after listing.
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