The maiden public issue of RK Swamy continued to receive strong demand from investors, who bought 25.78 times the offer size on March 6, the final day of bidding. As per the subscription data available with the exchanges, the participants picked 21.22 crore equity shares against IPO size of 82.32 lakh equity shares, reports Moneycontrol.
Retail investors and non-institutional investors (high networth individuals) maintained the dominance, buying 33.31 times and 34.24 times the allotted quotas, while qualified institutional buyers picked 20.58 times the portion set aside for them, the report states.
Employees also showed good interest in the issue, bidding 2.46 times the reserved portion.
The Mumbai-based marketing services company launched its initial public offering on March 4 to raise Rs 423.56 crore at the upper price band. The price band for the RK Swamy IPO is Rs 270-288 per share.
Srinivasan K Swamy and Narasimhan Krishnaswamy, the promoters of the company, as well as investors Evanston Pioneer Fund LP, and Prem Marketing Ventures LLP are the selling shareholders in the OFS.
The company will be spending Rs 54 crore out of the net fresh issue proceeds for its working capital requirements, Rs 10.98 crore for setting up a DVCP studio, and Rs 33.34 crore for IT infrastructure development.
Further, Rs 21.74 crore will be utilised for setting up of new CEC and CATI of the company and the remaining funds will be used for general corporate purposes.
“This is a strategic issue”
In an interview with Storyboard18, Narasimhan Krishnaswamy said the IPO is an evolution of the organisation over a period of time as it has moved from the marketing communication world to the full-service market research world, and to the customer data analytics field. In the journey of a company, the promoters have to consider the future development and growth of an organisation.
The second consideration he said is “Who are we competing with?” “This is a strategic issue. We compete with a large number of international organisations that have come to India over the last two or three decades, and have pretty much acquired many companies in the country and have established their presence.”
The company competes with organisations that are publicly listed companies from their respective geographies. If there is a Japanese company like Dentsu, it’s listed in Tokyo. Publicis is listed in Paris and WPP is listed in London. American companies are listed in New York. So, they come in with that scale of capital and are able to then compete at a different financial level.
“We have been competing to the extent we can with our own resources, and I think we need to step up the competition with the multinational companies. That’s another reason we need to be publicly listed.”
Krishnaswamy said, “The third reason is that a public profile by itself is a marketing initiative. People don’t realise that. Public profiling is financial at one level, but it’s also marketing at another level. So, we believe, it will help us a lot in the overall marketplace and initiatives that we’re doing.”
He added, Last but not least, here is another strategic consideration. Our clients are all large corporations and institutions. Barring a few, most of them you will find are in the listed space. It is a reality that large companies like to work with other large companies. This is a fact of life. And even from that standpoint, a listing will help us enormously.”