Titagarh Wagons Limited, a part of the promoter group of Cimmco Limited proposes to sell 15,43,090 shares of face value of 10/- each representing 5.64% of the share capital of the Company on Thursday December 27, 2018 (“T Day”) (for non-Retail Investors only) and on Friday, December 28, 2018 (“T+1 Day”) (for Retail Investors and for Non-Retail Investors who choose to carry forward their un-allotted bids). The offer for sale will help CIIMCO to conform to the minimum public holding norm of 25 percent.
Previous CIMMCO OFS
CIMMCO came out with an OFS at a floor price of Rs. 45/- in Nov 2018 which was cancelled as due to some technical issue, the transfer of underlying shares could not be made to the Designated Stock Exchange’s Clearing
About CIMMCO OFS
|Offer Size||15,43,090 shares|
|Retail Offer Size||10 % of Issue Size reserved for Retail|
|Retail Discount||5% to the Cut off price|
|Reservation Retail||1,54,309 shares|
|Non-Retail Offer Size||13,88,781 shares|
|Market Lot||1 share|
|Tick Size||Rs 0.05|
|Face Value||Rs 10/-|
|Floor Price||Rs 38.00/-|
|Allocation Methodology||Proportionate Method|
|Bid Opening Date (IC/MF/OTH/NII )||27th December’2018|
|Bid Closing Date (IC/MF/OTH/NII)||27th December’2018|
Update Day 1
on T day (27/12) only 11.62% subscription from non retail
OFS Allocation Methodology
- Retail investor shall mean an individual investor who places bids for Offer Shares of total value of not more than Rs. 2,00,000/- (Rupees Two Lakhs) aggregated across Stock Exchanges.
- A Retail Investor may bid at any price above the Floor Price and/or bid at “Cut-Off Price”. “Cut-Off Price” means the lowest price, as shall be determined, at which the Offer Shares are sold in the Non-Retail Category, based on all valid bids received on T Day.
- Allocation to retail Investors shall be made based on the Cut-Off Price. Upon determining Cut-Off Price for the Retail Investors, the Other Shares reserved for such category shall be allocated to eligible bids of Retail Investors on price priority method at multiple clearing prices / Cut-Off’ price in accordance with SEBI OFS Circulars. In the case of retail potion being oversubscribed, the aggregate number of Offer Shares bid for at a particular clearing price / Cut-Off Price, as the case may be, is more than available quantity then the allocation for such bids will be done on a proportionate basis at such clearing price (at or above the Cut-Offer Price) / the Cut-Off Price, as the case may be.
- Individual investors shall have the option to bid in the Retail Category and the Non-Retail Category. However, if the cumulative bid value by such an individual investor across both categories exceeds Rs. 2,00,000/- (Rupees Two Lakhs), the bids in the Retail Category will become ineligible. Further, if the cumulative bid value by an individual investor in the Retail Category across the Stock Exchanges exceeds Rs. 2,00,000/- (Rupees Two Lakh only), such bids shall be rejected.
- Settlement shall take place on a trade for trade basis. For bids received from Non-Retail Category on T Day, non-institutional investors and institutional investors who place orders with 100% of the order value deposited upfront, settlement shall take place on a T+I Day, in with the SEBI OFS Circulars. In the case of institutional investors who place bids without depositing 100% of the order value upfront, settlement shall be as per the existing rules for secondary market transactions (i.e., on T+2 Day).
For the bids received on T+l Day, from the Retail Category and from the un-allotted non-Retail Investors who choose to carry forward their bid to T+l Day, the settlement shall take place on T+3 Day.
In case of non-institutional investors and institutional investors bidding with 100% margin upfront who chose to carry forward their un-allotted bids to T+1 Day, the settlement shall take place<on_T+2_Day.
- The allocation to the non-Retail Investors shall be at price equal to the Cut-off Price or higher as per the bids.
Cimmco had primarily been since 1957 in the business of Railway Wagons and Heavy Engineering Projects / Products at Bharatpur (Rajasthan).
The Company is having installed capacity for manufacturing of wagons, coaches, underframe 2240 Vehicular Units (VUs) and Industrial Machinery 14200 MT per annum and comes under a large Industrial Unit.
The use of finished products like wagon is made for transportation of freight traffic by Indian Railways across India and close circuit transportation by some Industrial users like Thermal Power Projects. So far as Industrial Machinery is concerned it caters to Greenfield projects as well as replacement requirements in various Industrial segments viz. Cement plant, Fertiliser plant, Chemical plant, Steel plant
Manufacturing activities of CIMMCO are broadly categorized under –
- Wagon Manufacturing
- Engineering & Projects Divisions (EPD)
- Hydro Mechanical Division
- Specialized Products
CIMMCO Share Price Chart
|(Loss) befor extra ord||-1756.05||-1,595.42|
|Add: exceptional items||614.12||449.91|
|(Loss) befo Tax||-2,370.17||-2,045.33|
|Loss aft Tax||-2,332.44||-1,057.34|
Salient points and Assessment:
- CIMMCO was acquired by Titagarh Wagons Ltd.
- CIMMCO was later amalgamated with Titagarh Agrico Private Limited.
- The Company has identified tractors as a separate segment. Tractor production was kept on hold pending certain approvals.
- Company has a healthy order book for wagons from Indian Railways
- Offer looks reasonable considering the price, but is of very small size of 58 Lac only for Retail.
- on T day only 11.62% response from non retail.
- Standard disclaimer: I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk.