The initial public offerings of small and medium companies (SMEs) have gained momentum, thanks to the sharp spike in the valuation of such shares listed on the main bourses.

The prices have surged even as there is no sign of any significant revival in the earnings of these companies in the near term.

Total Transport System, which came out with an IPO to raise Rs17 core and list on SME platform NSE Emerge, attracted investment interest of Rs2,200 crore, becoming the highest subscribed SME issue.

The company’s IPO, which was priced at Rs45 a share, received bids for 49.26 crore shares against the total issue size of 37.80 lakh.

High-net-worth investor Mukul Agarwal picked up a 4.75 per cent stake in the company.

Another SME IPO, Keerti Knowledge and Skills, which was priced at Rs52 a share, was oversubscribed 1.81 times. The total issue size was 7.80 lakh shares, but it received bids for 14.12 lakh shares.

Shanti Overseas (India), which offered 20.04 lakh shares to raise Rs10 crore, received bids for 2.88 crore shares. Both these closed on July 28 and will be listed on NSE Emerge.

“Unlike the IPOs of established companies listing on the main bourses, SME issues are reasonably priced and leave something on the table for shareholders after listing,” said an analyst.

The Total Transport System issue, which closed on July 28, was oversubscribed 130 times.

Over Rs1,000 cr garnered

Total Transport became the second issue to attract investment interest of over Rs1,000 crore after Infobeans, which got bids of Rs1,150 crore. Both the issues were lead managed by Sarthi Capital Advisors.

Total Transport is a logistics company specialising in less-than-container load and cargo consolidation, wherein small shipments are consolidated and moved to over 1,100 destinations worldwide by the company.

The minimum order quantity for one lot was 3,000 equity shares and the maximum subscription for retail investors was Rs2 lakh. Total Transport received retail interest of 21.64 crore applications, the highest ever for an SME IPO.

It got about 27.20 crore applications from non-institutional investors, including 6.04 crore bids from corporate and 20.66 crore bids from individuals (other than retail individual investors), as per NSE data.

Source: The Hindu Business Line