Power Mech Projects lists at a substantial premium

Power Mech Projects Ltd got listed at a substantial premium from its initial sale price of 600 rupees on Wednesday as a heavy subscription helped the IPO sail through in a flat to weak market.

Power Mech's 270-crore-rupee IPO got subscribed by 38 times earlier in August with the institutional tranche 27.5 times; high net worth individuals 133 times and retail investors 3.4 times.

Power Mech gained 55.20 rupees, or 9.20 rupees, to 655.20 rupees in early deals on the National Stock Exchange.

The company provides commissioning, erection and testing of boilers, turbines and generators and its order book stands at 4,000 crore rupees.Power Mech expects fresh orders of 1,500 by the end of August. The company also operates in overseas markets such as Saudi Arabia, South Africa and the Middle East and has clients such as the National Thermal Power Corporation.

Power Mech will get 135 crore rupees from this IPO, which it will deploy in paying off some debt and improving its working capital cycle. The remaining 135 crore rupees will go to venture investors who made the offer for sale.

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