Titagarh Wagons settled at a premium of 31% at Rs 707.20 on BSE over the initial public offer price of Rs 540, on its debut today, 21 April 2008.

Titagarh Wagons debuted at Rs 550, a premium of 1.85% over IPO price of Rs 540. On BSE, 53.47 lakh shares were traded in the counter. The stock hit a high of Rs 734.40 and a low of Rs 550.

Titagarh Wagons, a private sector railway wagon manufacturer in India, had priced its initial public offer (IPO) at the lower end of the Rs 540 - Rs 610 price band.

The initial public offering (IPO) of Titagarh Wagons had received bids for 1.6 crore shares as against 23.83 lakh shares on offer. The issue was subscribed 6.75 times. The qualified institutional buyer's portion was subscribed 10.36 times,non institutional investor's portion was subscribed 2.76 times, retail investor portion was subscribed 0.97 times and employee reservation portion was subscribed 0.07 times.

Private equity investor Blackstone has picked up a minority interest in Titagarh Wagons for Rs 672 a share, which is the fifth major investor to put money in Titagarh Wagons. Other investors include GE Capital Infrastructure (15%), JP Morgan (5%), 2i Capital (6%) and ChrysCapital (6.5%).

Titagarh Wagons is a leading private sector wagon manufacturer in India. It manufactures railway wagons, bailey bridges, heavy earth moving and mining equipment, steel and SG iron castings of moderate to complex configuration etc.

It is into three broad business lines - wagon manufacturing, special projects and heavy earth moving and mining equipment division. Money raised through this IPO will be used for setting up an EMU manufacturing facility at Uttarpara unit, modernising and expanding the existing facilities at Titagarh and Uttarpara units, setting up an axle machining and wheelset assembly facility at Uttarpara unit, constructing a corporate office and a design cum research and development office. Money will also be used for strategic acquisition or investments and brand building exercise and General corporate purposes.

The existing order book of the company stands at Rs 753.11 crore with the rolling stock division constituting nearly Rs 669.39 crore as on 31 January 2008.

The company reported a net profit of Rs 26.02 crore on sales of Rs 207.53 crore in sixth months ended September 2007.

The current price of Rs 707.20 discounts its half year ended September 2007 annualised EPS of Rs 28.2, by a PE multiple of 25.07.

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