pared to its peers.
Brokerage Prabhudas Lillad-her Pvt. Ltd, recommended a 'subscribe' rating for the IPO and highlighted that while the firm has good long-term prospects with scope of decent returns over the next 2-3 years, it would offer limited gains at listing.
Parag Milk will allot at least 75% of the shares on a proportionate basis to qualified institutional buyers, 15% to non-institutional investors, comprising high net-worth individuals, and 10% to retail investors.
Based on the price band set by the firm, the total issue size will range between Rs752.6 crore and Rs767.6 crore, of which the firm's promoters and private equity (PE) investors will collectively garner upward of Rs450 crore by selling 20.57 million shares.
IDFC Private Equity, a wholly owned subsidiary of IDFC Ltd, has offered to sell about 58.4% of its holding. The Mumbai-based entity, which holds about a 20.1% stake, will sell about 8.26 million shares, according to the share sale documents.
Other PE investors in the company—India Excellence Business Fund (IBEF) and IBEF-1 sponsored by Motilal Oswal Financial Services Ltd—will sell 6.02 million shares.
The company intends to raise Rs300 crore in fresh capital.
Shares of Parag Milk were quoting at a premium of Rs5-15 per share in the grey market on Wednesday, after rising to Rs35-40 apiece last week, two dealers said, requesting anonymity, adding that investor interest was subdued due to expensive valuations.
"The issue is expensive, and interest in grey market is not much, as people are not expecting to gain big on listing," said one of the dealers cited above.
The grey market is an over-the-counter market where IPO shares are bought and sold before a company officially lists on the stock exchange.