The issue comprises sale of 1,93,32,346 shares, including offloading of 96,66,173 shares -- amounting to 13.74% stake -- by the parent firm Mahindra and Mahindra. Normandy Holdings would sell 92,71,180 shares, while Kedaara Capital would offloa 3,94,993 scrips. Normandy Holdings is a 100% subsidiary of Kedaara Capital.
The minimum bid lot for the offer is 34 equity shares and in multiples of 34 shares thereafter. The book running lead managers to the issue are Kotak Mahindra Capital Company and Axis Capital.
Here’s what the brokerages say about the issue:
Centrum Wealth Research
According to the brokerage, at the higher end of the price band of Rs 429, the issue is priced at P/E of 66.9x (post dilution) on FY17 basis, which appears to be expensive given the low financial performance (FY15-17 - revenue and PAT CAGR of 18% and 8%, respectively, with negative operating cash flows in the last 2 years).
“Even if money raised at such valuations was flowing into the company, it would have ultimately belonged to shareholders. But in this case 100% of the money raised is going to the selling shareholders and not into the company,” the brokerage added.
The issue looks expensive at the given valuation and clubbing that with the lackluster performance of other M&M group companies it becomes difficult to logically recommend subscribing to the issue, it said.
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