Aegis Vopak Terminals IPO Off to a Moderate Start: What Investors Should Know

The initial public offering (IPO) of Aegis Vopak Terminals, a leading storage solutions provider for liquid bulk and LPG, has kicked off with a 26% subscription rate on its first day. The company, which serves a vital role in India’s energy logistics infrastructure, is seeking to raise up to Rs 2,800 crore through a fresh issue of 11.91 crore shares.

How is the IPO Performing?

As of the end of the first day, the IPO had received bids for 1,77,49,179 shares out of 6,90,58,296 shares on offer. This translates to a subscription rate of 26%. While the retail portion saw a 19% subscription rate, the non-institutional investor (NII) category recorded a 3% subscription. Interested qualified institutional buyers (QIBs) submitted 882 bids.

The IPO is currently trading at a grey market premium (GMP) of Rs 6-7, indicating a modest 2.5% premium over the issue price.

What Analysts Say

Market observers believe the IPO’s premium reflects the company’s strategic importance in India’s LPG and liquid bulk infrastructure. However, Bajaj Broking cautions that the pricing may be factoring in strong future growth expectations. They suggest investors view this IPO as a long-term play on infrastructure and energy logistics growth but advise weighing the premium valuation against the company’s limited historical profitability and potential execution risks associated with upcoming capital expenditure projects.

Key Details about the IPO

Here are some key details about the Aegis Vopak Terminals IPO:

• IPO Price Band: Rs 223 to Rs 235 per share
• Minimum Investment (Retail): 63 shares (Rs 14,805 at the upper price band)
• Listing Date: June 2, 2023 (expected)
• Stock Exchanges: BSE and NSE
• Use of Proceeds: Repaying or prepaying borrowings, acquiring a cryogenic LPG terminal in Mangalore, and general corporate purposes.

Financial Performance

Aegis Vopak Terminals reported a revenue of Rs 570.12 crore and a net profit of Rs 86.54 crore in FY24. For the nine months ended December 2024, the company’s PAT stood at Rs 85.89 crore.

Lead Managers and Registrar

ICICI Securities, BNP Paribas IIFL Securities, Jefferies India, and HDFC Bank are managing the IPO, while Link Intime is the registrar.