ASK Automotive closes debut day with 10% listing gains

• The stock listed at ₹304 as compared to its issue price of ₹282.
• Its marketcap is at ₹6,010 crore, as per Bombay Stock Exchange.
• The ₹834 crore IPO was a complete offer for sale and was subscribed 51X.

ASK Automotive’s stock debuted on the D-street at an 8% premium on Wednesday. The grey market was expecting 11% listing gains. The stock listed at ₹304 as compared to its issue price of ₹282.

The stock gained during the session to close the day with 10% listing gains.

The company's market cap stands at ₹6,010 crore, as per Bombay Stock Exchange. The ₹834 crore IPO was subscribed 51 times, with qualified institutional buyer (QIB) being subscribed by 142 times.

The listing gains of the last few market debuts have been largely positive but there have been a few hits and misses too.

Here are the listing gains of the last few market debuts.

High-entry barrier business

ASK Automotive’s price band has been set at ₹268-282 per share. It’s a book-built issue of ₹834 crore, and is completely an offer-for-sale with no net proceeds going back to the company.

It has raised ₹250 crore from anchor investors like Goldman Sachs Fund, Morgan Stanley Asia (Singapore), Copthall Mauritius Investment, BNP Paribas Arbitrage, Societe Generale and SBI Life Insurance.

The company’s promoters are Kuldip Singh Rathee and Vijay Rathee, and started operations in 1989. Its listed peers in the market are Uno Minda, Bharat Forge, Endurance Technologies and Suprajit Engineering.

ASK Automotive is the largest manufacturer of brake-shoe and advanced braking systems for two-wheelers in India. It has a market share of approximately 50% in FY23 in terms of production volume for original equipment manufacturers and the branded independent aftermarket, on a combined basis.

The company has in-house design and engineering capabilities that allows them to deliver complex precision components. Also, the business they’re in is a high-entry barrier business.

“ASK Automotive is a well-established manufacturer of safety systems and critical engineering solutions with an extensive suite of systems and solutions for electric vehicle as well as internal combustion engine sectors and long-standing customer relationships with both Indian and global OEM players,” says a report by Anand Rathi, which gave it a ‘subscribe-long term’ rating as it believes the issue is fairly priced.

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