Shree Ram Twistex GMP in focus: Shree Ram Twistex, a manufacturer of cotton yarns whose IPO garnered massive investor interest during its three-day bidding period, with subscription crossing over 53 times, is set to debut on the bourses on Monday, March 02.
Despite receiving a solid response from investors, the grey market premium (GMP) indicates that the stock might list at a discount to its issue price.
According to market sources, the grey market premium (GMP) of Shree Ram Twistex is ₹-20 per share, indicating that the stock could list at ₹84 per share, a 20% discount from the IPO price of ₹104 apiece.
At the time of the bidding opening, the GMP was trading at ₹7.5 per share, and in the following session, it improved to ₹13.5, only to drop to ₹17 in the previous session and further to ₹20 in today’s session.
The grey market premium reflects the expected difference between an IPO’s issue price and its anticipated listing price in the unofficial market. However, analysts caution that GMP is only an early indicator and should not be the sole factor in making investment decisions.
Shree Ram Twistex IPO subscription details
The company raised ₹110.24 crore from investors, which is entirely a fresh issue of 1.06 crore shares.
The issue, which ran between February 23 and February 25, attracted bids worth ₹4,813 crore, 43.66 times higher than its offer size of ₹110.24 crore, with non-institutional investors placing bids worth ₹3,642 crore.
Although the IPO received a muted response during the first two days of bidding, it gathered momentum on the final day, with the subscription rate reaching 43.66 times. The IPO closed the first day with a subscription rate of 0.12 times and 0.20 times on the second day.
Non-institutional investors showed strong interest in the Shree Ram Twistex IPO, cumulatively bidding for 35.02 crore shares — 220.30 times higher than the 15.9 lakh shares allotted to them — resulting in total bids worth ₹3,642 crore.
The retail portion saw a strong spike in demand, with the quota being subscribed 76.63 times, while the qualified institutional buyer (QIB) portion was subscribed 3.94 times.
It proposes to use funds from the issue towards setting up a solar power plant, repayment of debt, funding working capital, and for general corporate purposes.
About the company
Shree Ram Twistex is engaged in the manufacturing of cotton yarns, including compact ring-spun and carded yarns, both combed and carded. Its product range also includes value-added yarns such as Eli Twist (combed and carded), compact slub yarns, and Lycra-blended yarns.
It operates exclusively in the business-to-business (B2B) segment, supplying its products to institutional buyers such as textile manufacturers, garment exporters, bulk purchasers, and fabric processors.
The company’s exclusive B2B focus allows it to streamline its production and supply chain processes around the needs of large-scale buyers. It also enables it to build long-term client relationships and offer customised yarn solutions tailored to specific technical parameters, including count, twist, and strength, according to the company’s DRHP report.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
