Newmalayalam Steel shares list flat IPO price on NSE SME; misses GMP estimates

The company plans to use the net proceeds from the offer to upgrade its IT and manufacturing technology, expand its solar power generation facility, and fund the construction of a new factory shed with storage within its Kerala premises.

Shares of Newmalayalam Steel made a dismal start on its stock market debut after listing flat at the IPO price of Rs 90 per share on the NSE SME platform.

The listing, however, missed grey market estimates where shares were trading at a premium of 33 percent over the issue price. The grey market is an unofficial ecosystem where shares start trading much before the offer opens for subscription and continue to trade till the listing day.

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The Rs 41.76-crore public offer, which is purely fresh issue of 46.4 lakh shares, received robust investor interest as the issue was subscribed over 50 times in three days. Retail individual investors were at the forefront, buying 88 times the portion reserved for them. Non-institutional investors followed next, purchasing 24 times their allotted quota. QIBs or qualified institutional buyers bought just 1.26 times the portion set aside for them.

NewMalayalam Steel Limited, based in Kerala, manufactures galvanized pipes, tubes, and sheets with an installed capacity of 3,500 MT at its electric resistance welding tube mill. Its clients include Jaihind Steel, Aashico Ventures, and George Infra. Known for quality, its products are marketed under the "Demac Steel" brand.

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The company plans to use the net proceeds from the offer to upgrade its IT and manufacturing technology, expand its solar power generation facility, and fund the construction of a new factory shed with storage within its Kerala premises. Additionally, the funds will support advertising, marketing, and brand building, meet incremental working capital needs, cover issue-related expenses, and serve general corporate purposes.

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