Pramara Promotions IPO GMP (Grey Market Premium)

Pramara Promotions IPO GMP
Pramara Promotions IPO GMP

by Tanushree Jaiswal Last Updated: Sep 13, 2023 - 02:57 pm 2.3k Views

Pramara Promotions IPO ₹15.27 crore comprises entirely of a fresh issue with no offer for sale (OFS) component in the IPO from promoters and early shareholders. It is a fixed price IPO and the IPO price has been fixed at ₹63 per share. Since it is a fixed price issue, there is no price discovery through the book building route. The fresh issue portion of the IPO entails the issue of 24.24 lakh shares which at the fixed IPO price of ₹63 per share is worth ₹15.27 crore. Since there is no OFS component in the IPO, the fresh issue size of ₹15.27 crore also represents the overall size of the IPO of Pramara Promotions Ltd.

How to apply for the Pramara Promotions Ltd IPO

Pramara Promotions 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 ₹126,000 in the IPO at fixed IPO price level of ₹63 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 ₹252,000. The table below captures the lot sizes permissible.

Application Lots Shares Amount
Retail (Min) 1 2,000 ₹126,000
Retail (Max) 1 2,000 ₹126,000
HNI (Min) 2 4,000 ₹252,000

As per the terms of the offer, there is a small portion that is reserved for the market maker. The net offer size, which is the balance left after the market maker quota is removed, is distributed equally between the retail and the non-retail portion. Here the non-retail portion predominantly comprises the HNI / NII investors and to a lesser extent it includes some QIB investors also. The table below captures the gist of the allocation in the IPO.

Market Maker Shares Offered 1,24,000 shares (5.12% of the offer size)
NII (HNI) Shares Offered 11,50,000 shares (47.44% of the offer size)
Retail Shares Offered 11,50,000 shares (47.44% of the offer size)
Total Shares Offered 24,24,000 shares (100.00% of offer size)

Like in every SME IPO, Pramara Promotions IPO 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 Pure Broking Ltd, who will act as the market maker for the SME IPO of Pramara Promotions Ltd. The company has set aside 124,000 shares for the market maker.

The issue opens for subscription on 01st September 2023 and closes for subscription on 05th September 2023 (both days inclusive). The basis of allotment will be finalized on 08th September 2023 and the refunds will be initiated on 11th September 2023. In addition, the demat credits are expected to happen on 12th September 2023 and the stock is scheduled to also list on 13th 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 Pramara Promotions 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 Pramara Promotions 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 Pramara Promotions IPO, data is available.

Date Grey Market Price (GMP)
13-Sep-2023 ₹31
12-Sep-2023 ₹31
11-Sep-2023 ₹35
10-Sep-2023 ₹40
9-Sept-2023 ₹40
8-Sept-2023 ₹25
7-Sept-2023 ₹25
6-Sept-2023 ₹21
5-Sept-2023 ₹21
4-Sept-2023 ₹6
3-Sept-2023 ₹5
2-Sept-2023 ₹1
1-Sept-2023 ₹1
31-Aug-2023 ₹1
30-Aug-2023 ₹1

In the above case, the GMP trend shows that the grey market premium has opened at around ₹1, but up by ₹31 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 01st 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, Pramara Promotions Ltd has shown very modest traction in the grey market and for now hints at almost a flat listing on the bourses.

If you consider the fixed price of the IPO of Pramara Promotions Ltd at ₹63, then the likely listing price is being signalled at around ₹64 per share as per the GMP indicator on 31st 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 ₹1 on the fixed IPO price of ₹63 indicates a listing premium of a very moderate 1.59% for Pramara Promotions Ltd over the listing price. That almost hints at a flat and insipid listing although these are still early days. That pre-supposes a listing price of approximately ₹64 per share, when Pramara Promotions Ltd lists on 13th 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.

Read about Pramara Promotions IPO

Business Brief on Pramara Promotions Ltd

Pramara Promotions Ltd is a promotional marketing agency, which was set up in 2006. It is engaged in the business of ideation, conceptualization, designing, manufacturing, and marketing of promotional products and gift items. It caters to clients across a cross section of industry groups including, FMCG (fast moving consumer goods), QSR (quick service restaurants), pharma, beverage companies, cosmetics, telecom, media, and a lot more. Pramara Promotions Ltd offers niche services to these companies that inter alia comprise of cross promotions, loyalty and reward tabulation, corporate gifting, sweepstakes promotions etc. The company also arranges to manufacture the products under an OEM arrangement, wherein the company makes such products like water bottles, pens, and other gift items under an outsourcing agreement with another manufacturer. These are white labelled manufacture where the products are appropriately branded with the company's logo or design and used as strategic promotional collaterals for better mindshare.

Pramara Promotions Ltd has, till date, designed and manufactured over 5,000 products. The company has also expanded its product offerings and has recently launched proprietary brands like "Toyworks" and "Tribeyoung". Pramara Promotions Ltd has an overall staff strength of 83 employees. Some of its major strengths in the business include its existing track record, its strong franchise with corporate customers, ability to manufacture and deliver solutions in a cost effective manner and fairly stringent quality control and production standards. It is also into digital gifting ideas, which are growing in importance and appeal in the current market.

The company has been promoted by Rohit Lamba and Sheetal Lamba. The promoter holding in the company currently stands at 95.41%. However, post the fresh issue of shares as part of the IPO, the promoter equity holding share will reduce to 69.81%. The fresh issue funds will be used by the company for meeting its working capital funding gaps and for general corporate expenses. Part of the monies raised will also go towards meeting the expenses of the issue. While Fedex Securities 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 Pure Broking Ltd.

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.


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