Nitesh Estates falters on debut

Shares of realty firm Nitesh Estates saw poor debut. The stock settled at Rs 50.95 on BSE, a 5.64% discount to the initial public offer price of Rs 54.

The stock debuted at Rs 50, a 7.40% discount to the initial public offer (IPO) price. The stock hit a high of Rs 55 and low of Rs 48.05. The counter clocked volume of 1.53 crore shares on BSE

Nitesh Estates' IPO ended on 27 April 2010 with 1.16 times subscription. The IPO garnered bids for 7.44 crore shares as against 6.41 crore shares on offer. The company had priced the IPO at the lower end of the Rs 54 to Rs 56 per share price band.

On 22 April 2010, Nitesh Estates raised more than Rs 58 crore through issue of 1.08 crore shares to five anchor investors including HSBC Bank (Mauritius), Nomura India Investment Fund, SBI Tax Advantage Fund, SBI Magnum Multicap Fund, and HDFC Monthly Income Plan. The shares were allotted at Rs 54 per share, at the lower end of Rs 54 to Rs 56 per share price band for the initial public offer.

Bengaluru-based Nitesh Estates is primarily engaged in development of residential projects. The company reported net profit of Rs 7.21 crore on revenue of Rs 47.84 core for nine months ended December 2009.

Nitesh Estates plans to use the proceeds from the IPO to acquire joint development rights, to finance existing and upcoming projects, repay loans and for other general corporate purposes.