PKH Ventures IPO subscribed 6% on Day 1. Check GMP and other details

The initial public offering (IPO) of PKH Ventures, which kicked off earlier on Friday, was subscribed just 6% on Day 1.

While the retail category subscription stood at 13%, the non-institutional part too saw muted bids at just 10%. There were no bids from qualified institutional buyers on Day 1.

According to market sources, the company's shares are commanding a marginal premium of Rs 10 in the unlisted market.

Analysts have mixed views on the IPO on lofty valuations, despite the cushioning of the diversified business model and asset-light construction segment.

"On the upper end of the price band, the issue will be valued at 24.8x of annualized FY23 earnings which we believe is richly valued. We, thus, recommend an “Avoid” rating for the issue," said Stoxbox.

Meanwhile, Hensex Securities advised investors to apply to the IPO from a medium to long-term perspective.

The IPO comprises fresh equity issue of up to 1.82 crore shares and an offer for sale (OFS) of up to 73.7 lakh equity shares by selling shareholders.

Under the OFS, promoter Pravin Kumar Agarwal will offload 73.7 lakh equity shares.

The company is offering its shares in the price range of Rs 140-148. About 50% of the net offer is reserved for the QIB portion, 15% for the NII category and 35% for retail investors.

Ahead of the IPO opening, the company's shares are trading at a mild premium of Rs 8-9 in the unlisted market.

PKH Ventures is in the business of construction and Development, hospitality and management services. The civil construction business is executed by its Subsidiary and construction arm, Garuda Construction.

The company does its civil construction works for third-party developer projects and has also been awarded two government projects and three government hotel development projects. It had an order book of Rs 560 crore as of March 2022.

The proceeds from the fresh issue will be used towards investment by way of equity in its construction subsidiaries, inorganic growth through acquisitions, and other general corporate purposes.

IDBI Capital Markets is the book-running lead manager to the issue and Link Intime India is the registrar.