The Rs 168-crore IPO of Prostarm Info Systems has been subscribed over 97 times its offer size on its third and final day of public bidding (May 29). The public issue of the Maharashtra-based power solution products-maker received bids for nearly 109 crore shares, as against the offer size of 1.12 crore shares, according to NSE data.
Non Institutional Investors (NII) retained their lead in the subscription rally, by booking their reserved portion by a whopping 222 times. Qualified Institutional Buyers (QIBs) followed, subscribing the portion kept for them over 104 times. Retail investors meanwhile subscribed their reserved portion around 39.5 times.
The inverter-maker's IPO entirely comprises a fresh issue of 1.6 crore equity shares at a price band of Rs 95-105 per share. The issue will remain open for public bidding between May 27 to May 29. Investors can apply for a minimum of 142 shares, with a minimum investment of Rs 14,910, and in multiples thereafter.
The company intends to utilise IPO proceeds for working capital requirements, repayment of debt, and inorganic growth through unidentified acquisitions.
Prostarm Info Systems GMP:
Ahead of their listing, the unlisted shares of the company were trading at Rs 125 apiece in the grey market, according to data on Investorgain as seen at 5.15 pm. This implies a grey market premium (GMP) of over 19 percent (Rs 20) over the IPO price of Rs 105 apiece.
According to IPO Watch, the unlisted shares of the company were trading with a grey market premium of Rs 20 over the IPO price at Rs 125 apiece.
"The Prostarm Info Systems IPO witnessed an overwhelming response from all investor categories ... Supported by a Grey Market Premium (GMP) in the range of 16–17%, the offering has generated strong listing expectations in the market," said Gaurav Garg from Lemonn Markets Desk.
Should you apply?
Gaurav Garg from Lemonn Markets Desk advised investors to subscribe to the IPO with a medium to long-term investment horizon, citing promising industry outlook, well-established operations, and reasonable pricing. "The company is well-poised to benefit from structural tailwinds in energy storage and green energy solutions, backed by solid execution and a growing customer base," he said.
"The company combines a strong financial track record, scalable business model, diversified offerings, and robust return ratios with a valuation that appears attractive relative to peers," Garg further said.
Bajaj Broking meanwhile advised investors to subscribe to the public issue for long term. "The sudden boost in its bottom lines from FY23 onward is on account of its ability to provide all related services under one roof. Based on its financial data, the IPO appears fully priced. Investors may lap it up for long term," the brokerage said.
Anchor Book:
The UPS and inverter maker raised Rs 50.4 crore via anchor book on May 26, a day before the IPO opened for public bidding. Prostarm Info Systems in its filing to exchanges said it has finalised allocation of 48 lakh equity shares to anchor investors at a price of Rs 105 per equity share.
Chattisgarh Investment, Astrone Capital, Steptrade Revolution Fund, Abundantia Capital, and Swyom India Alpha Fund were amongst eight institutional investors participated in the anchor book.
Choice Capital Advisors is acting as the book running lead manager to Prostarm Info Systems IPO.
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