C P S Shapers IPO GMP (Grey Market Premium)

C P S Shapers IPO worth ₹11.10 crore comprises entirely of a fresh issue with no offer for sale (OFS) component in the IPO from promoters and early shareholders. The fixed price for the IPO has been fixed at ₹185 per share and that will be the price at which the IPO will be sold to the public. The fresh issue portion of the IPO entails the issue of 6 lakh shares which at the upper end of the price band at ₹185 is worth ₹11.10 crore. Since there is no OFS component in the IPO, the fresh issue size of ₹11.10 crore is also the size of the overall IPO of C P S Shapers Ltd.

How to apply for C P S Shapers IPO

The stock of C P S Shapers IPO has a face value of ₹10 and bidders can only bid in minimum lot size of 600 share each, entailing a minimum investment of ₹111,000 in the IPO at fixed IPO price of ₹185 per share. That is also the maximum that a retail investor can bid in the IPO. HNIs, NIIs can bid for minimum of 2 lots of 1,200 shares entailing an investment of ₹222,000. The table below captures the lot sizes permissible.

As per the terms of the offer, 50% of the net offer is reserved for the retail investors with the balance 50% being reserved for non-retail investors. This includes the HNI / NII investors as well as QIB investors, if any. Since it is a fixed price issue there is no price discovery involved as all applications must happen at the IPO price. It is captured in the table below.

Like in every SME IPO, the IPO of C P S Shapers Ltd also has a market maker. The Market maker typically provides buy and sell quotes post listing to ensure liquidity and low basis risk in the stock. In this case, the makers will be Shreni Shares Private Ltd, who will act as the market maker for the SME IPO of C P S Shapers Ltd. The company has set aside 31,200 shares for the market maker.

The issue opens for subscription on 29th August 2023 and closes for subscription on 31st August 2023 (both days inclusive). The basis of allotment will be finalized on 05th September 2023 and the refunds will be initiated on 06th September 2023. In addition, the demat credits are expected to happen on 07th September 2023 and the stock is scheduled to also list on 08th September 2023 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated.

About C P S Shapers IPO GMP Pricing

The grey market price (GMP) trading normally starts about 4-5 days prior to IPO opening and continues till the listing date. In the case of C P S Shapers Ltd, we already have GMP data for the last 2 days, which should give a reasonable picture of the likely listing.

There are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP, especially the liquidity conditions in the market. Secondly, the extent of subscription for the IPO has a deep impact on the GMP as it is indicative of investor interest in the stock. GMP can also technically be in negative, which means the stock would list at a discount to the issue price.

There is one small point to remember here. The GMP is not an official price point, just a popular informal price point. However, in most cases, it has been observed to be a good informal gauge of demand and supply for the IPO. Hence it does give a broad idea of how the listing is likely to be and how the post-listing performance of the stock would be.

How has the GMP panned out in last few days

GMP tends to be a good mirror of the real stock story. More than the actual price, it is the GMP trend over time that gives insights about which direction the wind is blowing. Here is a quick GMP summary for C P S Shapers IPO for which the data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹42, and up by ₹135. Of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription on 29th August 2023 and also watch the progress, as that would have a very significant impact on the GMP. In the past, stocks which got oversubscribed in the IPO also saw a very robust positive shift in the grey market pricing. For a start, C P S Shapers Ltd has shown good traction in the grey market.

If you consider the fixed IPO price of the new issue of C P S Shapers Ltd at ₹185, then the likely listing price is being signalled at around ₹227 per share as per the GMP indicator on 25th August 2023. This is dynamic and keeps changing. One data point to track will be the subscription update on the stock as that would chart the GMP course.

The GMP of ₹42 on the upper end of the book built IPO price of ₹185 indicates a listing premium of a healthy 22.70% for C P S Shapers Ltd over the listing price. That pre-supposes a listing price of approximately ₹227 per share, when C P S Shapers Ltd lists on 08th September 2023. Of course, these are approximations, so you must keep a margin of safety. One needs to observe the trend of GMP closely as that gives the best hints on listing status. Look at the time series trend than on numbers.

Brief on C P S Shapers Ltd

C P S Shapers Ltd was incorporated in 2012, to primarily engage in the business of manufacturing Shapewear for Men and Women. C P S Shapers Ltd manufactures and sells Shapewear for men and women through its brands “Dermawear” and the company currently sells the products via offline and online channels.  C P S Shapers Ltd has a very wide product portfolio, which includes saree shapewear, mini shaper, sports bra, Mini corsets, tummy reducers, Active Pants, Denim, Mask, and other shapewear. The company boasts of a pan-India presence and its distributor network is spread across 28 states and 8 Union territories in India. It also has a robust export market and reaches out to 5 countries; including Canada, Germany, Australia, UK, and the US. While the company has its manufacturing unit located at Meerut in Uttar Pradesh; its warehousing facilities are located at Palghar in Maharashtra, and Tirupur in the southern state of Tamil Nadu.

As of date, the company has over 50 products in its catalogue, more than 6,000 retail presence counters, over 10 online sales channels, established presence in omnichannel selling as well as a strong presence in 6 countries. The company was founded by Rajendra Kumar and, Abhishek Kamal Kumar; with the intent to create a forward-looking brand that combines innovative designs with functionality and comfort. The idea is to feel comfortable and confident in their body. The journey began when Dermawear introduced a range of stockings and shapewear, revolutionizing the way people perceive body shaping and support garments. Today, the product portfolio of C P S Shapers Ltd includes an array of meticulously crafted shapewear and athleisure clothing, catering to diverse body types and fashion preferences.

The issue is being lead managed by Shreni Shares Private Ltd while Bigshare Services Private Ltd will be the registrars to the public issue of C P S Shapers Ltd. The company will raise funds towards buying plant & machinery at the manufacturing facility, purchase of CVs, capex for solar systems, upgradation of IT software and infrastructure as well as repayment of loans and funding working capital gaps.