Quess Corp recently concluded it’s blockbuster IPO. The IPO broke all records by being oversubscribed by more than 147 times. This is the second highest number of bids any unlisted company has received for it’s IPO in the last eight years. Quess Corp’s issue size is Rs 400 Crores and it managed to garner a cumulative demand of more than Rs 58,800 Crore. Quess is a facilities management company based in Bangalore founded in 2007. It has operations in more than 25 cities in India and 8 other countries.
The Indian Economy is one of fastest growing economies of the world and the IT services sector is the engine driving this growth. The IT sector in India is expected to double it’s revenues by 2020. Quess Corp will directly benefit from this growth as more companies hire it’s services to manage their new expanded offices. Companies like Amazon, L&T Infotech, Apple, Facebook and Google have recently announced expansion plans for their businesses in India.
The shares of Quess Corp are expected to list on the National Stock Exchange and the Bombay Stock Exchange on the 12th of July 2016. The trading will commence from 10:00 am and last till 3:30 pm. Many analysts expect the share to list above Rs 500 considering the high demand. The shares will be credited to your demat account in NSDL within the next two days. So you can view your allotted shares by 10th July. The refund will be given a day after on the 11th July and you can expect the amount blocked under ASBA to be released by your bank on Monday.
Quess Corp IPO Allotment Basis
The retail investor section of the IPO was oversubscribed by 32 times, hence most investors will be allotted shares by the registrar on the basis of a lottery. The chances of getting an allotment is very low and hence most investors will buy the share on the listing day driving up it’s price. The shares of Quess Corp are commanding a hefty grey market premium of more than 50% over the issue price of Rs 317. You can check your application status online on the website of the registrar for the issue.
Most retail investors who submitted multiple applications through different accounts have received nil allotments while those who have applied only through one or two applications have received the minimum lot of 45 shares. This indicates that the registrar for the issue is using an algorithm to weed out multiple applicants. If you have different demat accounts with the same address then they can easily detect your multiple applications. Only 35% of the issue size is reserved for small investors , so most of them will be disappointed because of non allotment.
It is difficult to predict the direction of the shares of Quess Corp, it is most likely that the shares will fall after listing above Rs 500. Driven by the hype and publicity, retail investors are expected to buy it the first day of trading driving up it’s share price. So you should consider selling it above Rs 550.
If it lists around Rs 400 then you can consider buying more of the stock as a long term investment with a one year perspective. The stock could touch Rs 900 By end of FY17. This is our target price for this stock provided the economic conditions remain favorable for the markets. The global economy still faces uncertainty and volatility which could affect the Indian markets in the short term.