Spices maker Shyam Dhani Industries IPO attracts 241x subscription on day 2, GMP zooms to 88%

Shyam Dhani Industries IPO

Rajasthan-based spices maker Shyam Dhani Industries' initial share sale has continued to receive overwhelming response from investors even on the second day of bidding, i.e. December 23. The grey market investors also seem to be bullish on the IPO as the trading premium saw significant rise.

Shyam Spices hit capital markets on December 22 to mobilise Rs 38.48 crore via its initial public offering (IPO) of 54.98 lakh shares which comprises of entirely fresh issue. The price band for the offer is Rs 65-70 per share.

The company has received 94.91 crore equity shares bids, which was 241.02 times over the offer size of 39.38 lakh shares via 1.85 lakh applications. The demand has been seen from across categories of investors.

Non-institutional and retail investors were at the leading position to boost subscription numbers in the last two days, bidding 372.82 times and 352.8 times their allotted quotas, while the portion set aside for qualified institutional buyers was subscribed 10.69 times.

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Perhaps, the massive subscription numbers also seem to have reflected in the grey market premium. The market observers said the IPO shares attracted 88 percent premium in the grey market, up from 65 percent seen on December 23.

Shyam Dhani Industries that manufactures variety of spices (including ground spices, blend spices and whole spices under the brand name SHYAM) has already raised Rs 10.92 crore from seven anchor investors at the upper price band on December 19, a day before the IPO opening for the public.

Holani Venture Capital Fund, Mint Focussed Growth Fund, Meru Investment Fund, Saint Capital Fund, SBI Opportunities Fund, Small Industries Development Bank of India, and Rajasthan Global Securities picked 15.6 lakh shares via anchor book.

Before the IPO launch, the company also raised Rs 2 crore by issuing 2.86 lakh shares at the upper price band, in pre-IPO placement. So, the issue size has been reduced to 54.98 lakh shares from 57.84 lakh shares planned earlier.

Shyam Dhani intends to utilise IPO proceeds for its working capital requirements, repayment of borrowings, brand creation and marketing, purchase of new additional machineries, purchase and installation of solar rooftop plant, and general corporate purpose.

In addition to spices offerings, the company also trades in grocery products, herbs and seasonings.

Holani Consultants is acting as the merchant banker for the Shyam Dhani Industries IPO.