Inspire Films IPO GMP (Grey Market Premium)

The ₹21.23 crore IPO of Inspire Films IPO comprises entirely of a fresh issue with no offer for sale (OFS) component in the IPO from promoters and early shareholders. The price band has been fixed in the range of ₹56 to ₹59 per share and the final price will be discovered in this band via book building. The fresh issue portion of the IPO entails the issue of 35.98 lakh shares which at the upper end of the price band at ₹59 is worth ₹21.23 crore. Since there is no OFS component in the IPO, the fresh issue size of ₹21.23 crore is also the size of the overall IPO.

How to apply for the Inspire Films IPO

The stock of Inspire Films IPO has a face value of ₹10 and bidders can only bid in minimum lot size of 2,000 share each, entailing a minimum investment of ₹118,000 in the IPO at the upper end of the price band of ₹59 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 4,000 shares entailing an investment of ₹236,000. The table below captures the lot sizes permissible.

As per the terms of the offer, 50% of the net offer is reserved for the qualified institutional buyers (QIBs), 15% of the offer is reserved for the HNI / NII investors and the balance 35% is reserved for the retail investors. It is a Book Built issue with the price band and the final price will be discovered through book building process. It is captured in the table below.

Like in every SME IPO, the IPO of Inspire Films 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 market makers will be Share India Securities Ltd, who will act as the market maker for the SME IPO of Inspire Films Ltd. The company has set aside 1,80,000 shares for the market maker.

The issue opens for subscription on 25th September 2023 and closes for subscription on 27th September 2023 (both days inclusive). The basis of allotment will be finalized on 03rd October 2023 and the refunds will be initiated on 04th October 2023. In addition, the demat credits are expected to happen on 05th October 2023 and the stock is scheduled to also list on 06th October 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 Inspire Films IPO GMP

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 Inspire Films 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.

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 Inspire Films IPO for which the data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹25, but now its down by ₹18 where it has stayed over the next 3 days for which GMP data is available. Of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription on 25th September 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, Inspire Films Ltd has shown good traction in the grey market.

If you consider the upper end of band price of the IPO of Inspire Films Ltd at ₹59, then the likely listing price is being signalled at around ₹79 per share as per the GMP indicator on 21st September 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 ₹20 on the upper end of the book built IPO price of ₹59 indicates a listing premium of a healthy 33.9% for Inspire Films Ltd over the listing price. That pre-supposes a listing price of approximately ₹79 per share, when Inspire Films Ltd lists on 06th October 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.

Read about Inspire Films IPO

Brief on Inspire Films Ltd

Inspire Films Ltd was incorporated in the year 2012, and the company is engaged in the creation, production, distribution, and exhibition of television and digital content. The company operates in 3 business verticals. It has a content stack for general entertainment channels (GEC) and here it caters to the content needs of TV channels like Star Plus, Colors TV, Zee TV, Sony, Dangal, etc. These are typically priced on an episode based contract basis. The second vertical is the content creation for the Over the Top (OTT) segment. This includes content creation for Netflix, Amazon, Sony Liv, Disney Hotstar, Voot, Zee5, etc. These contracts are also episode based. The third vertical of Inspire Films Ltd pertains to regional content and it currently produces content in regional languages like Telugu, Tamil, Malayalam, Bengali, Marathi, etc. It has produced over 10,000 episodes of popular content till date across the broadcast offering.

The company has been promoted by Yash Arabinda Patnaik and Beyond Dreams Entertainment Private Ltd. The promoter holding in the company currently stands at 93.98%. However, post the fresh issue of shares, the promoter equity holding will get diluted to 69.17%. The fresh issue funds will be used by the company for meeting its working capital needs and for general corporate expenses. While Narnolia Financial Services Ltd will be the lead manager to the issue, Maashitla Securities Private Ltd will be the registrar to the issue. The market maker for the issue will be Share India Securities Ltd.