Milky Mist IPO opens with 15% GMP: Apply or avoid?
What's the story
Milky Mist Dairy Food Ltd, a prominent player in the packaged food sector, has launched its initial public offering (IPO) today. The company has fixed the price band for its IPO at ₹133-140 per share. The public issue will remain open for subscription until August 13. The firm had previously raised ₹465.3 crore from anchor investors on Monday.
Investment breakdown
Anchor investment ahead of IPO
Milky Mist had allotted 3.32 crore equity shares to anchor investors at ₹140 per share, the upper end of the IPO price band.
Zulia Investments Pte Ltd bagged the highest allocation of 1.14 crore shares or 34.39% of the anchor investor portion, with an investment worth around ₹160 crore.
Other notable investors include Nippon India Mutual Fund, HDFC Mutual Fund, and ICICI Prudential Mutual Fund, among others.
Subscription specifics
Lot size, reservation for different investor categories
The lot size for the Milky Mist IPO has been fixed at 107 equity shares. Investors can bid in multiples of this lot size.
The reservation structure for the IPO is such that no more than 50% is reserved for Qualified Institutional Buyers (QIBs), at least 15% for Non-Institutional Investors (NIIs), and at least 35% for retail investors.
Timeline
Key dates to remember
Tentatively, the basis of allotment for the Milky Mist IPO will be finalized on August 14.
The company is expected to initiate refunds on August 17, with shares credited to successful allottees' demat accounts on the same day.
The Milky Mist share is likely to be listed on the BSE and NSE on August 18.
Market performance
GMP on the rise
The GMP for the Milky Mist IPO was ₹21, at the time of writing.
The upper end of the IPO price band and current premium in the gray market suggest an estimated listing price of ₹161 per share, which is 15% higher than the IPO price of ₹140.
The GMP has been on an upward trend over the last seven sessions, indicating a positive market sentiment.
Issue structure
Fresh issue, OFS portion in Milky Mist IPO
The Milky Mist IPO comprises a fresh issue of equity shares worth up to ₹1,428 crore and an OFS of up to ₹125 crore.
The company had initially planned to raise ₹2,035 crore through its IPO but revised the target after a pre-IPO round in May.
The funds from the fresh issue will be used for debt repayment, expansion of manufacturing facilities in Tamil Nadu, and strengthening cold-chain infrastructure, among other things.