Garden Reach Shipbuilders IPO Details

Issue Open Sep 24, 2018
Issue Close Oct 1, 2018
IPO Price ₹118
Face Value ₹10
IPO Size ₹344.69 Cr
Listing At BSE, NSE
IPO Lot Size 120
GARDEN REACH SHIPBUILDERS & ENGINEERS LIMITED

Our Company was incorporated at Calcutta under the Companies Act, 1913 with the Registrar of Companies, Calcutta, as "Garden Reach Workshops limited" on February 26,1934. Our Company changed its name to "Garden Reach Workshops Private Limited" on November 5,1957 after the promulgation of the Companies Act, 1956. Thereafter, our Company changed its name to "Garden Reach Workshops Limited" on November 30,1961 pursuant to the acquisition of our Company by the Government of India and the status of our Company was changed from 'private limited company' to 'deemed public limited company under the provision of Section 43(1A) of the Companies Act, 1956 with effect from January 8,1976. The name of our Company was again changed from 'Garden Reach Workshop Limited' to 'Garden Reach Shipbuilders & Engineers Limited' on December 31, 1976 by the Registrar of Companies, West Bengal. Our Company became a public company pursuant to a special resolution of the shareholders at an Annual General Meeting held on August 25, 2017. For further details, including change in Registered Office of our Company, see "History and Certain Corporate Matters" on page 163 of the Prospectus dated October 3, 2018 (herein referred to as the "Prospectus").

Registered Office: 43/46 Garden Reach Road, Kolkata - 700 024, West Bengal, India; Contact Person: Sandeep Mahapatra, Company Secretary and Compliance Officer Tel: 033-2469 8545; Fax: 033-2469 8150;
Email: co.sec@grse.co.in; Website: www.grse.in; Corporate Identity Number: U35111WB1934GOI007891
OUR PROMOTER THE PRESIDENT OF INDIA ACTING THROUGH THE MINISTRY OF DEFENCE GOVERNEMENT OF INDIA

Our Company has filed the Prospectus with the Registrar of Companies, West Bengal at Kolkata (the "RoC") on October 3, 2018 and the Equity Shares are proposed to be listed on the National Stock Exchange of India Limited ("NSE") and the BSE Limited ("BSE") and the trading will commence on October 10, 2018.

BASIS OF ALLOTMENT

INITIAL PUBLIC OFFERING OF 29,210,760 EQUITY SHARES OF FACE VALUE OF RS.10 EACH ("EQUITY SHARES") OF GARDEN REACH SHIPBUILDERS & ENGINEERS LIMITED ("THE COMPANY" OR THE "ISSUER") THROUGH AN OFFER FOR SALE BY THE PROMOTER, THE PRESIDENT OF INDIA, ACTING THROUGH THE MINISTRY OF DEFENCE, GOVERNMENT OF INDIA (THE "SELLING SHAREHOLDER") FOR CASH AT A PRICE OF RS.118* PER EQUITY SHARE ("THE OFFER PRICE"), AGGREGATING TO RS. 3,435 89 MILLION (THE "OFFER"). THE OFFER INCLUDED A RESERVATION OF UP TO 572,760 EQUITY SHARES AGGREGATING TO RS. 64.72 MILLION FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED HEREIN) ("EMPLOYEE RESERVATION PORTION"). THE OFFER LESS EMPLOYEE RESERVATION PORTION IS REFERRED TO AS THE NET OFFER. THE OFFER AND THE NET OFFER CONSTITUTED 25.50% AND 25.00% RESPECTIVELY, OF THE POST OFFER PAID-UP EQUITY SHARE CAPITAL OF THE COMPANY.

*A discount of RS. 5 per Equity Share to the Offer Price has been offered to the Retail Individual Bidders ("Retail Discount") and a discount of Rs. 5 per Equity Share to the Offer Price has been offered to the Eligible Employees bidding in the Employee Reservation Portion ("Employee Discount").

Offer Price: Rs.118 per Equity Share of face value of Rs.10 each

The Offer Price is 11.80 times the face value

Risk to Investor

i. The two Book Running Lead Managers associated with the Offer have handled 15 public issue in the past three years out of which 4 issues closed below the issue price on listing date.
ii. There are no comparable listed companies in India engaged in the same line of business as our Company, hence comparison with industry peer are not applicable.
iii. The Price/Earnings ratio base on diluted earnings per share ("Diluted EPS") as per our Restated Financial Statements for the Financial Year 2018, at the upper end of the Price Band, is as high as 16.53.
iv. The average cost of acquisition per Equity Share for our Promoter is Rs. 4.00* per Equity Share. The Offer Price at the upper end of the Price Band is Rs. 118.
v. As a result of national security related concerns, certain material information in relation to the business and operations has been classified as "confidential" by the Ministry of Defence, Government of India and our Company. As a result, our Company has not (I) disclosed such information in the Prospectus; or (II) provided such information to the BRLMs, the legal counsels and other intermediaries involved in this Offer. Our Company cannot assure you that the Prospectus contains all such material information necessary for inventors to make an informed investment decision. Further, Investors should take note of risk factor number 3 on page 23 of the Prospectus titled "We have been granted certain relaxation by SEBI from the strict enforcement of certain requirements and disclosure of certain information under SEBI ICDR Regulation and SEBI Listing Regulations".

* Our Company has been unable to ascertain the acquisition price and the nature of consideration for an initial transfer of 70,000 equity shares of the Company due to non-availability of the share transfer deeds and thus our Company has not considered the price for initial acquisition while computing average cost of acquisition of equity shares by the promoter of our Company.

BID/OFFER BID/OFFER OPENED ON SEPTEMBER 24, 2018 BID/OFFER CLOSED ON OCTOBER 1, 2018
PROGRAMME

This Offer was made in terms of rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended ("SCRR"). In accordance with Regulation 26(1) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended ("SEBI ICDR Regulations"), the Offer was made through the Book Building Process wherein not more than 50% of the Net Offer was made available for allocation on a proportionate basis to Qualified Institutional Buyers ("QIBs") ("QIB Portion"). 5% of the QIB Portion was made available for allocation on a proportionate basis to Mutual Funds only and the remainder of the QIB Portion was made available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above the Offer Price. However, if the aggregate demand from Mutual Funds is less than 5% of the QIB Portion, the balance Offered Shares available for allocation in the Mutual Fund Portion tfl be added to the remaining QIB Portion for proportionate allocation to QIBs. Further, not less than 15% of the Net Offer was made available for allocation on a proportionate basis to Non-institutional Bidders and not less than 35% of the Net Offer was made available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. Further up to 572,760 Equity Shares had been reserved for allocation and Allotment on a proportionate basis to Eligible Employees bidding in the Employee Reservation Portion, subject to valid bids being received from them at or above the Offer Price. All Bidders mandatorily participated in the Offer through an Application Supported by Blocked Amount ("ASBA") process by providing details of their respective bank account which will be blocked by the Self Certified Syndicate Banks ("SCSBs"). For details, see "Offer Procedure" on page 434 of the Prospectus.

The Offer received 12,329 applications for 29,551,920 Equity Shares (prior to technical rejections) resulting in 1.01 times subscription. The details of the applications received in the Offer from various categories are as under (prior to technical rejections):

SI No.

Category

No. of Applications No. of Equity Shares applied Shares Reserved as per Prospectus No. of times Subscribed Amount (Rs.)
A Retail Individual Investors 12,088 2,248,680 10,023,300 0.22 254,591,420.00
B Non-lnstitutiona! Investors 11 1,306,920 4,295,700 0.30 154,182,000.00
C Qualified Institutional Bidders 7 25,932,000 14,319,000 1.81 3,059,976,000.00
D Eligible Employee 223 64,320 572,760 0.11 7,268,280.00
  Total 12,329 29,551,920 29,210,760 1.01 3,476,017,700.00

Final Demand

A summary of the final demand as at different Bid prices is as under:

SI. No. Bid Price (in Rs.) Bid Quantity (%) To Total Cumulative Total Cumulative Total %
1 114.00 21,360 0.07 29,758,920 100.00
2 115.00 37,800 0.13 29,737,560 99.93
3 116.00 8,400 0.03 29,699,760 99.80
4 117.00 7,320 0.02 29,691,360 99.77
5 118.00 27,714,840 93.13 29,684,040 99.75
6 Cut-off 1,969,200 6.62 1,969,200 6.62
  TOTAL 29,758,920 100.00    

The Basis of Allotment was finalized in consultation with the Designated Stock Exchange, being NSE on October 5, 2018.

A. Allotment to Retail Individual Investors (after technical rejections)

The Basis of Allotment to the Retail Individual Investors, who have bid at the Cut-Off Price or at the Offer Price of Rs. 118 per Equity Share (less Retail Discount of Rs. 5/- per Equity Share that had been offered to Retail Individual Investors), was finalized in consultation with the NSE. This category has been subscribed to the extent of 0.21 times. The total number of Equity Shares Allotted in Retail Portion is 2,133,480 Equity Shares (under subscribed portion of 7889820 Equity Shares is spilled over to QIB Categories) to 11,476 successful Retail Individual Investors. The category-wise details of the Basis of Allotment are as under:

SI. No Category (No. of Shares applied for) No. of Applications Received % of Total Total No. of Equity Shares applied % to Total No. of Equity Shares allotted per applicant Ratio Total No. of Equity Shares allotted
1 120 9,405 81.95 1,128,600 52.90 120.00 1:1 1,128,600
2 240 1,065 9.28 255,600 11.98 240.00 1:1 255,600
3 360 325 2.83 117,000 5.48 360.00 ' 1:1 117,000
4 480 171 1.49 82,080 3.85 480.00 1:1 82,080
5 600 139 1.21 83,400 3.91 600.00 1:1 83,400
6 720 36 0.31 25,920 1.21 720.00 1:1 25.920
7 840 81 0.71 68,040 3.19 840.00 1:1 68,040
8 960 29 0.25 27,840 1.30 960.00 1:1 27,840
9 1080 10 0.09 10,800 0.51 1080.00 1:1 10,800
10 1200 46 0.40 55.200 2.59 1200.00 1:1 55.200
11 1320 8 0.07 10,560 0.50 1320.00 1:1 10,560
12 1440 5 0.04 7,200 0.34 1440.00 1:1 7,200
13 1560 7 0.06 10,920 0.51 1560.00 1:1 10.920
14 1680 149 1.30 250,320 11.73 1680.00 1:1 250,320
  TOTAL 11,476 100.00% 2,133,480 100.00%     2,133,480

B. Allotment to Non-Institutional Investors (After Technical Rejections)

The Basis of Allotment to the Non-Institutional Investors, who have bid at the Offer Price of Rs. 118 per Equity Share, was finalized in consultation with the NSE, The Non-Institutional Portion has been subscribed to the extent of 0.30 times. The total number of Equity Shares Allotted In this category is 1,298,280 Equity Shares (undersubscribed portion of 2997420 Equity Shares is spilled over to QIB Categories) to 10 successful Non-Institutional Investors. The category-wise details of the Basis of Allotment are as under:

SI. No Category (No. of Shares applied for) No. of Applications Received % of Total Total No. of Equity Shares applied % to Total No. of Equity Shares allotted per applicant Ratio Total No. or Equity Shares allotted
1 1,800 2 20.00 3,600 0.28 1,800.00 1:1 3,600
2 1,920 1 10.00 1,920 0.15 1,920.00 1:1 1,920.
3 2,400 2 20.00 4,800 0.37 2,400.00 1:1 4,800
4 3,360 1 10.00 3,360 0.26 3,360.00 1:1 3,360
S 4,200 1 10.00 4,200 0 32 4,200.00 1:1 4,200
6 4,440 1 10.00 4,440 0.34 4,440.00 1:1 4,440
7 4,800 1 10.00 4,800 0.37 4,800.00 1:1 4,800
8 1,271,160 1 10.00 1,271,160 97.91 1,271,160.00 1:1 1,271,160
    TOTAL 10 100.00% 1,298,280 100.00   1,298,280

C. Allotment to QIBs

Allotment to QIBs, who have Bid at the Offer Price of Rs. 118 per Equity Share or above, has been done on a proportionate basis in consultation with the NSE. This category has been subscribed to the extent of 1.81 times of QIB Portion. As per the SEBI ICDR Regulations, Mutual Funds were Allotted 5.00% of the Equity Shares of QIB Portion available i.e. 1,285,794 Equity Shares and other QIBs, including Mutual Funds were Allotted the remaining available Equity Shares i.e. 24,430,086 Equity Shares on a proportionate basis. The total number of Equity Shares Allotted in the QIB Portion is 25,715,880 Equity Shares (including undersubscribed portion of 11,396,880 Equity Shares spilled over from Employee Reservation Portion, Retail & HNI Categories), which were allotted to 25,715,880 successful QIB Bidders. The category-wise details of the Basis of Allotment are as under:

SI. No. Category Fls/Banks FII MFs Ics NBFC Others Total
1 QIB 2 0 3 2 0 0 7

D. Allotment to Eligible Employees (after technical rejections)

The Basis of Allotment to the Eligible Employees, who have placed bid at the Cut-Off price or at the Offer Price of Rs. 118 (Employee Discount of Rs. 5/- per Equity Share was offered to the Eligible Employees applying under Employee Reservation Portion), was finalized in consultation with NSE. The Eligible Employees Portion has been subscribed to the extent of 0.11 times. The total number of Equity Shares Allotted in this category is 63,120 Equity Shares to 220 successful Bidders. The under subscribed portion of 509,640 shares were spilled over to QIB categories on proportionate basis respectively. The category-wise details of the Basis of Allotment are as under:

SI. No Category (No. of Shares applied for) No. of Applications Received % of Total Total No. of Equity Shares applied % to Total No. of Equity Shares allotted per applicant Ratio Total No. of Equity Shares allotted
1 120 123 55.91 14,760 23.38 120.00 1:1 14,760
2 240 32 14.55 7,680 12.17 240.00 1:1 7,680
3 360 14 6.36 5,040 7.98 360.00 1:1 5,040
4 480 24 10.91 11,520 18.25 480.00 1:1 11,520
5 600 12 5.45 7,200 11.41 600.00 1:1 7,200
6 840 4 1.82 3,360 5.32 840.00 1:1 3,360
7 960 4 1.82 3,840 6.08 960.00 1:1 3,840
8 1080 2 0.91 2,160 3.42 1,080,00 1:1 2,160
9 1200 2 0.91 2,400 3.80 1,200.00 1:1 2,400
10 1680 2 0.91 3,360 5.32 1,680.00 1:1 3,360
11 1800 1 0.45 1,800 2.85 1,800.00 1:1 1,800
  TOTAL 220 100.00 63,120 100.00     63,120

The IPO committee of Board of Directors of the Company on October 6, 2018 has taken on record the Basis of Allotment of Equity Shares approved by the Designated Stock Exchange, being NSE and has allotted the Equity Shares to various successful Bidders. The Allotment Advice-cum-intimations are being dispatched to the address of the investors as registered with the depositories. Further, the instructions to the Self Certified Syndicate Banks for unblocking of funds, transfer to Public Offer Account haw been issued on October 6, 2018 and payment instructions to non-Syndicate brokers have been issued on October 9, 2018. In case the unblocking of funds or credit of Equity Shares is not received within six working days, investors may contact the Registrar to the Offer at the address given below. The Equity Shares Allotted to the successful Allottees have been uploaded on October 9, 2018 for credit into the respective beneficiary accounts subject to validation of the account details with the depositories concerned. The Company has filed the Listing applications with NSE and BSE on October 8, 2018. The Company has received listing and trading approvals from NSE and BSE and the trading will commence on October 10, 2018.

All capitalised terms used and not specifically defined herein shall have the same meaning as ascribed to them in the Prospectus.

INVESTORS PLEASE NOTE

The details of the allotment made have been hosted on the website of the Registrar to the Offer, Alankit Assignments Limited at www. alankit.com.

All future correspondence in this regard may kindly be addressed to the Registrar to the Offer quoting full name of the first/ sole Bidder, Bid cum Application Form number, Bidder DP ID, Client ID, PAN, date of submission of Bid cum Application Form, address of the Bidder, number of Equity Shares applied for, the name and address of the Designated Intermediary where the Bid cum Application Form was submitted by the Bidder and a copy of the Acknowledgment Slip received from the Designated Intermediary at the address of Registrar to the Offer.

Alankit Assignments Limited
Registered Office: Alankit House, 205-208, Anarkali Complex, Jhandewalan Extension, New Delhi -110 055
Tel: +91-11-42541234/42541951/1952
Fax: +91-11-4254 1201
E-mail: grse_ipo@alankit.com
Investor Grievance E-mail: grse_jgr@alanklt.com
Website: www.alankit.com
Contact Person: Sachin Gupta/ S. Arunraj
SEBI Registration No.: INR000002532

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARES ON LISTING OR THE BUSINESS PROSPECTS OF GARDEN REACH SHIPBUILDERS & ENGINEERS LIMITED.

For GARDEN REACH SHIPBUILDERS & ENGINEERS LIMITED
On behalf of Board of Directors
Date: October 9, 2018 Sd/-
Place: Kolkata Company Secretary and Compliance Officer

Garden Reach Shipbuilders & Engineers Limited is proposing, subject to applicable statutory and regulatory requirements, receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its Equity Shares through Offer for Sate and has filled the Prospectus with SEBI The Prospectus is available on the websites of SEBI, BSE, and NSE at www.sebi.gov.in, www.bseindia.com and www.nseindia.com, respectively, and at the websites of the BRLMs at www.idbicapital.com and www.yesinvest.in, respectively. Potential investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, see the section titled "Risk Factors" on page 21 of the Prospectus. Potential investors should not rely on the DRHP filed with SEBI for making any investment decision.

The offer and sale of the Equity Shares offered in the Offer has not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws in the United States, and unless such offer and sale is so registered, the Equity Shares may not be offered or sold within the United States. Accordingly, such Equity Shares are being offered and sold outside of the United States in offshore transactions in reliance on Regulation S promulgated under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. The Equity Shares are and may not be offered or sold, and bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction.

Garden Reach Shipbuilders IPO Basis of Allotment FAQs

  1. 1. How shares are allotted in Garden Reach Shipbuilders IPO?

    Check the basis of allotment document above to know about how the shares are allocated in Garden Reach Shipbuilders IPO. Note that there is a separate rule for allotment in each investor category (i.e. Retail, Non-Institutional, Institutional, Employee).
  2. 2. What is Garden Reach Shipbuilders IPO basis of allotment status?

    The Garden Reach Shipbuilders IPO basis of allotment (published above) tells you how shares are allocated to you in Garden Reach Shipbuilders IPO and category wise demand of IPO share.

    Visit the Garden Reach Shipbuilders IPO allotment status page to check the number of shares allocated to your application.

  3. 3. What is Garden Reach Shipbuilders IPO allotment process?

    Check the basis of allotment document above to know about how the shares are allocated in Garden Reach Shipbuilders IPO. Note that there is a separate rule for allotment in each investor category (i.e. Retail, Non-Institutional, Institutional, Employee).








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