Tarapur Transformers tumbles on debut

Settles at Rs 56.90 on BSE

Tarapur Transformers settled at Rs 56.90 on BSE, a discount of 24.13% to the initial public offer price of Rs 75 per share.

The stock debuted at Rs 75. The stock hit a high of Rs 97.50 and a low of Rs 54.10. On BSE, 6.35 crore shares were traded on the counter.

The current price of Rs 56.90 discounts the company's year ended March 2009 EPS of Rs 1.1, by a PE multiple of 51.72. The company had priced its IPO at the top end of the Rs 65-75 per share initial public offer (IPO) price band.

The IPO of Tarapur Transformers closed on 28 April 2010 with a subscription of 1.74 times. The qualified institutional buyers category was subscribed a mere 0.03 times, non institutional investors category was subscribed 5.07 times and retail individual investors (RIIs) category was subscribed 2.73 times.

The proceeds of the IPO will be utilized mainly for expansion and modernization of a manufacturing unit at Pali in Maharashtra and to part-finance an acquisition.

Tarapur Transformers is engaged in manufacturing, rehabilitation, up-gradation, and refurbishment of transformers.

Tarapur Transformers reported net profit of Rs 1.55 crore on sales of Rs 22.88 crore for the nine months ended December 2009.