September 26, 2018 / 1:15 PM / a year ago

Garden Reach Shipbuilders extends IPO closure, revises price band

(Reuters) - State-owned Garden Reach Shipbuilders & Engineers Ltd revised the price band for its initial public offering (IPO) to raise up to 3.45 billion rupees ($47.64 million) and extended the subscription offer by three days.

Employees of Garden Reach Shipbuilders & Engineers Ltd (GRSE), India's warship building company, work in front of the "Kadmatt", an anti-submarine warfare under construction, during a media tour at a dockyard in Kolkata April 22, 2015. REUTERS/Rupak De Chowdhuri/Files

The IPO received weak response from investors with only 67 percent of the shares on offer being subscribed on the closing day on Wednesday.

Investors bid for about 19.7 million shares, compared with the 29.2 million shares the government had put on the block, stock exchange data as of 1130 GMT showed on Wednesday.

The defence shipbuilder revised the lower end of its price range to 114 rupees from 115 rupees, while the upper end was maintained at 118 rupees for the IPO.

Garden Reach also extended the subscription offer till Oct 1, it said here late on Wednesday.

The government had initially planned to sell 20 million shares.

The company’s financials do not depict any particular growth trend given the “lumpy” nature of the cyclical ship-building business, Centrum Wealth Research said in a pre-IPO note.

The offering is part of the government’s plan disclosed last year to sell up to 25 percent of its stake in four state-owned companies under the control of the department of defence.

Earlier this year, Hindustan Aeronautics Ltd’s IPO did not manage to get full subscription, prompting the state-run military aircraft manufacturer to price its offer at the bottom end of the range, and raising a lower-than-expected 41.13 billion rupees for the government.

IDBI Capital Markets & Securities and YES Securities (India) were managing the Garden Reach Shipbuilders IPO.

($1 = 72.4200 Indian rupees)

Reporting by Chris Thomas and Tanvi Mehta in Bengaluru; Editing by Subhranshu Sahu and Sherry Jacob-Phillips

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