Infinium Pharmachem IPO GMP (Grey Market Premium)

Infinium Pharmachem IPO worth Rs. 25.31 crore, comprises entirely of a fresh issue of shares to the public. The price has been fixed at a level of Rs. 135 per share for the Infinium Pharmachem SME IPO. The fresh issue portion entails the issue of 18.75 lakh shares which at the IPO price of Rs. 135 is worth Rs. 25.31 crore. There is no OFS component so the fresh issue portion is also the overall size of the Infinium Pharmachem IPO.

The stock of Infinium Pharmachem IPO has a face value of Rs. 10 and bidders can only bid in minimum lot size of 1,000 share each, entailing a minimum investment of Rs. 135,000 in the IPO at the IPO price of Rs. 135 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 2,000 shares entailing an investment of Rs. 270,000. 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 while the balance 50% is reserved for the HNI / NII quota. Swastika Investmart Ltd will act as the market maker for the Infinium Pharmachem SME IPO. The company has set aside 94,000 shares for the market maker. There is also a reservation of 41,000 shares for employees, who are also eligible for a 10% (Rs. 13.50) discount on the IPO price.

The issue opens for subscription on 31st March 2023 and closes for subscription on 05th April 2023 (both days inclusive). The basis of allotment will be finalized on 11th April 2023 and the refunds will be initiated on 12th April 2023. In addition, the demat credits are expected to happen on 13th April 2023 and the stock is scheduled to list on 17th April 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. 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 Infinium Pharmachem Ltd, we already have GMP data for the last 4 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.

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 Infinium Pharmachem IPO for the which the data is available.

In the above case, the Infinium Pharmachem IPO GMP trend shows that the grey market premium has opened at around Rs. 4, of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription 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, Infinium Pharmachem Ltd has shown moderate traction in the grey market.

If you consider the Infinium Pharmachem IPO price at Rs. 135, then the likely listing price is being signalled at around Rs. 139.50 per share as per the GMP indicator on 03rd April 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.

Infinium Pharmachem IPO GMP of Rs. 4.50 on the IPO price of Rs. 135 indicates a listing premium of a moderate 3.33% for Infinium Pharmachem Ltd over the listing price. That pre-supposes a listing price of approximately Rs. 139.50 per share, when Infinium Pharmachem Ltd lists on 17th April 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.

Here is a quick background of Infinium Pharmachem Ltd. The company manufactures and supplies specialized iodine derivatives and active pharma ingredients (APIs). It also supplies iodination reaction-based bulk drugs. The bulk drugs are the inputs that go into formulations or medicines that we buy from the chemist. It caters to a range of industries including pharma, agrochemicals, nutraceuticals, and specialty chemicals. Its manufacturing plant is located in Gujarat and it services more than 15 countries globally.

Read What you must know about the Infinium Pharmachem IPO

The fresh issue portion will be used marketing and branding spends as well as for repayment of high cost loans; apart from meeting its working capital expenses partially. The issue will be lead managed by Swastika Investmart Limited while Bigshare Services Private Ltd will be the registrars to the SME IPO of Infinium Pharmachem Ltd.