4th IPO of 2017 on Tuesday

The equity market is to float its fourth initial public offering in the current fiscal year (started March 21) on Tuesday for Chodan Sazan Company.

A 10% stake in the company equaling 80 million shares will be offered on Tehran Stock Exchange’s Second Market through book building, Bourse Press reported.

Isatis Pooya Brokerage is set to act as the company’s bookrunner for the IPO.

Book building is a systematic process of generating, capturing and recording investor demand for shares during an IPO in order to support efficient price discovery.

About 24 million of the IPO’s total shares are slated to be offered to the company’s staff, according to a TSE announcement on Monday.

Each institutional and non-institutional investor will be able to purchase a maximum of 2,000 shares at the price range of 1,773 to 1,950 rials per share.

“CHDN” was listed in TSE’s metal products manufacturing group in March as the market’s 512th company. The company’s nominal capital is 800 billion rials ($20.56 million). It has forecasted a 251-rial earnings per share for this year (March 21, 2017-18) and realized 217 rials per share last year.

Established in 1982, Chodan Sazan is involved in design, production and supply of cast rolls, ingot moulds and accessories for the steel industry, according to the company’s website.

IPOs made their return to the equity market after a five-month hiatus back in early July. The first was a 5% stake in Behpardakht Mellat comprising 47.5 million shares offered on Tehran Stock Exchange with the initial market capitalization of 950 billion rials ($25.13 million).

The second IPO took place on August 8 for the telecom company MobinOne Kish by offering 10% of its shares to the public on Iran Fara Bourse. Its market cap stood at 100 billion rials ($2.63 million) and its EPS and P/E ratio reached 533 rials and 1.88 respectively, according to Securities and Exchange Organization.

The third was for Parsian Kowsar Hotel last week, with each share priced at 12,200 rials and purchased by 58,110 investors. However, 30,270 of the buyers sold off 10 million of the total 16.5 million shares purchased just a day after the IPO.

Before the recent offerings, all IPOs on the Iranian equity market had been suspended since early February, due to what the Securities and Exchange Organization referred to as an attempt to support investors and prevent liquidity flight.