Tiny IPO Soared 6835% in 2 Days (Here’s Why You Should Care)
GSM Foils, a manufacturer of pharmaceutical packaging foils, offered an IPO priced at ₹32 per share. Despite a recent sales dip, the company saw profits surge and the IPO was heavily subscribed by retail investors. The grey market premium suggests a potential 25% gain on listing.
CONTENTS: Tiny IPO Soared 6835% in 2 Days
GSM Foils IPO Opens
The IPO for GSM Foils began accepting subscriptions on May 24 and will close on May 28. Shares are priced at ₹32 each. GSM Foils, which manufactures Blister Foils and Aluminium Pharma Foils for pharmaceutical packaging, is promoted by Mohansingh L. Parmar and Sagar Girish Bhanushali. The IPO features a price band of ₹32 per equity share, each with a face value of ₹10. Investors must purchase a minimum lot size of 4,000 shares.
High-Quality Foils for Pharma
According to the company’s prospectus, GSM Foils specializes in producing Blister Foils and Aluminium Pharma Foils, also known as “Strip Foils,” used for packaging pharmaceutical medications such as tablets and capsules. Given that these materials come into direct contact with the medications, ensuring their quality is of utmost importance. Over the past few years, the company has developed considerable expertise in various types of foils used by the pharmaceutical industry.
Strong Profits, Peers Listed
The company’s promoters are Mohansingh L. Parmar and Sagar Girish Bhanushali.
According to the prospectus, GSM Foils’ listed peers include MMP Industries Ltd and Synthiko Industries Ltd.
Between March 31, 2022, and March 31, 2023, GSM Foils Limited saw a 124.62% increase in profit after tax (PAT), despite a sales decline of 8.3%.
Strong Investor Demand
–Tiny IPO Soared 6835% in 2 Days
The GSM Foils IPO has been subscribed 68.35 times by the end of day 2.
The retail portion saw a subscription rate of 106.12 times, while the non-institutional investor (NII) portion was subscribed 30.46 times.
According to data from chittorgarh.com, the company received bids for 22,30,92,000 shares against the 32,64,000 shares on offer.
On day 1, the IPO subscription status was 18.43 times.
IPO Details and Use of Proceeds
The GSM Foils IPO, valued at approximately ₹11.01 crore, comprises a fresh issue of 3,440,000 equity shares with a face value of ₹10 each. There is no offer-for-sale component included.
The company plans to utilize the net proceeds from the IPO for general corporate purposes, meeting working capital requirements, and financing the purchase of plant and machinery.
Bigshare Services Pvt Ltd is appointed as the registrar for the GSM Foils IPO, while Shreni Shares Limited acts as the book running lead manager. Additionally, Shreni Shares serves as the market maker for the IPO.
Grey Market Interest High
Today, the Grey Market Premium (GMP) for GSM Foils IPO stands at +8. This suggests that GSM Foils shares are trading at a premium of ₹8 in the grey market, as reported by investorgain.com. Based on the upper end of the IPO price band and the current premium observed in the grey market, the expected listing price for GSM Foils IPO is estimated at ₹40 per share. This reflects a 25% increase compared to the IPO price of ₹32 per share. The Grey Market Premium indicates investors’ willingness to pay above the issue price for the shares.
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