JAT Holdings IPO oversubscribed by nearly two times

The Rs. 2.2 billion Initial Public Offering (IPO) from JAT Holdings Ltd. has been oversubscribed by nearly two times.

When the issue closed on its official opening day on 20 July, JAT had received applications worth Rs. 3.95 billion.  

There had been 1,182 applications with payments via bank drafts and cheques requesting for Rs. 1.45 billion worth of shares. 

There were also a further 1,093 applications requesting for Rs. 958.8 million worth of shares, with payments made by RTGS/SLIPS/CEFTs transfers. The JAT IPO also received 20 applications requesting for shares worth Rs. 1.54 billion with payments made by guarantees.

The success of the IPO fell slightly short of JAT's expectations of over three times oversubscription but outperformed sceptics’ prediction of it barely managing. 

The IPO made available a 16.24% stake or 82.9 million shares at Rs. 27 each. The IPO combined an offer for subscription of 55.8 million shares and an offer for sale of 27 million shares.

Some analysts viewed the IPO price at Rs. 27 as expensive, while promoters emphasised it was coming at a discount. JAT will be the first-ever wood coating and paint manufacturer and exporter to list on the CSE. 

Funds raised via the IPO will be channelled towards several key growth initiatives, including a manufacturing plant in Bangladesh (JAT’s biggest export market), expansion into Africa, a first-of-its-kind R&D centre, and an aggressive foray into the Rs. 20 billion wall paint market.