Marco Cables & Conductors IPO GMP (Grey Market Premium)
The ₹18.73 crore of Marco Cables & Conductors IPO comprises of a fresh issue as well as an offer for sale (OFS) component in the IPO from promoters and early shareholders. It is a fixed price IPO with the price for the issue fixed at ₹36 per share. The fresh issue portion of the IPO entails the issue of 26.01 lakh shares which at the fixed IPO price of ₹36 per share is worth ₹9.36 crore. The offer for sale (OFS) portion of the IPO entails the sale of 26.01 lakh shares which at the fixed IPO price of ₹36 per share is also worth ₹9.36 crore. As a result, the overall issue of Marco Cables & Conductors Ltd will entail the issue of 52.02 lakh shares which at the fixed IPO price of ₹36 per share is worth ₹18.73 crore.
How to apply for the Marco Cables & Conductors IPO
The stock of Marco Cables & Conductors IPO has a face value of ₹10 and bidders can only bid in minimum lot size of 3,000 share each, entailing a minimum investment of ₹108,000 in the IPO at the fixed IPO price of ₹36 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 6,000 shares entailing an investment of ₹216,000. The table below captures the lot sizes permissible.
As per the terms of the offer, the company has set aside 5.54% of the overall issue size for the market makers to provide liquidity on the stock post listing. The balance shares (called the net offer) will be divided equally between retail investors and non-retail investors. Here non-retail investors predominantly comprise of HNI / NII investors but also include some corporates and QIBs too. Here is the detailed allocation across categories.
|Anchor Investor Shares Offered||Nil Shares|
|Market Maker Shares Offered||2,88,000 shares (5.54%)|
|Other Shares Offered||24,57,000 shares (47.23%)|
|Retail Shares Offered||24,57,000 shares (47.23%)|
|Total Shares Offered||52,02,000 shares (100.00%)|
Like in every SME IPO, the IPO of Marco Cables & Conductors Ltd also has a market maker. The Market maker 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 Shreni Shares, that will act as the market maker for the SME IPO of Marco Cables & Conductors Ltd. The company has set aside 2,88,000 shares for the market maker inventory.
The issue opens for subscription on 21st September 2023 and closes for subscription on 25th September 2023 (both days inclusive). The basis of allotment will be finalized on 28th September 2023 and the refunds will be initiated on 29th September 2023. In addition, the demat credits are expected to happen on 03rd October 2023 and the stock is scheduled to also list on 04th 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 Marco Cables & Conductors 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 Marco Cables & Conductors 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 Marco Cables & Conductors IPO for which the data is available.
|Date||Grey Market Price (GMP)|
In the above case, the GMP trend shows that the grey market premium has opened at around ₹8, and is down by ₹6. Of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription from 21st 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, Marco Cables & Conductors Ltd has shown good traction in the grey market.
If you consider the fixed price of the IPO of Marco Cables & Conductors Ltd at ₹36, then the likely listing price is being signalled at around ₹44 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 ₹8 on the fixed IPO price of ₹36 indicates a listing premium of a healthy 22.22% for Marco Cables & Conductors Ltd over the listing price. That pre-supposes a listing price of approximately ₹44 per share, when Marco Cables & Conductors Ltd lists on 04th 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.
Brief on Marco Cables & Conductors Ltd
Marco Cables & Conductors Ltd was incorporated in 1989 to manufacture and sell wires, cable wires, and conductors in India. The product portfolio of Metro Cables & Conductors Ltd include LT Aerial Bunched Cables, LT PVC Cables, AAAC Conductors, LT XLPE Cables and ASCSR Conductors. The manufacturing unit of Marco Cables & Conductors Ltd is located at Nashik in Maharashtra, having combined installed capacity of 18,000 KM of cables and wires per year. The LT Aerial Bunched Cables are used for overhead power distribution. These bunched cable provide high levels of safety and reliability combined with low instance of power loss and less chances of power pilferage. It also substantially reduces installation, maintenance, and operating costs; and is ideal for hilly, coastal and forest terrains.
Among the other key products manufactured by Marco Cables & Conductors Ltd, the AAAC Conductors are made out of an alloy of aluminium, magnesium, and silicon. This provides high levels of electrical conductivity due to the presence of magnesium and silicon. In addition, the LT XLPE Cables are manufactured with XLPE Insulation. The galvanizing is of mild steel which increases the safety of the cables for general use. Marco Cables & Conductors also makes ACSR Conductors, which comprise of solid or stranded steel core surrounded by strands of aluminium. The ACSR Conductor has high tensile strength making it useful for laying across rivers, overhead ground wires etc.
The company has been promoted by Sumit Sugnomal Kukreja, Sugnomal Mangandas Kukreja, and Komal Sumit Kukreja. The promoter holding in the company currently stands at 100.00%. However, post the fresh issue of shares and the OFS, the promoter equity holding share will get diluted to 72.18%. The fresh issue funds will be used by the company for meeting its capex towards purchase of solar power system and 1+12 Rigid Standing Machine. Part of the monies raised will also go towards working capital needs and general corporate expenses. While Shreni Shares Private Ltd will be the lead manager to the issue, Bigshare Services Private Ltd will be the registrar to the issue. The market maker for the issue is Shreni Shares.
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About the Author
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