Pyramid Technoplast IPO GMP (Grey Market Premium)

Pyramid Technoplast IPO GMP
Pyramid Technoplast IPO GMP

by Tanushree Jaiswal Last Updated: Aug 29, 2023 - 10:52 am 5.4k Views

Pyramid Technoplast IPO ₹153.05 crore worth comprises of an offer for sale and also of a fresh issue of shares. The offer for sale (OFS) component is by the promoters and early shareholders of the company. Here it must be noted that while the fresh issue component infuses fresh funds into the company, it also is EPS dilutive and equity dilutive. On the other hand, the OFS is just a transfer of shares so there is no fresh infusion of funds, but it also does not dilute the equity. The issue has been priced in the band of ₹151 to ₹166 per share and the IPO allotment price will be discovered post the book building of shares being completed during the IPO process. For our analysis, the upper end of the band is assumed as the benchmark price for all relevant calculations.

Pyramid Technoplast IPO details

Let us now look at the details of the issue of Pyramid Technoplast IPO. The offer for sale of the company IPO will entail the issue of 37,20,000 shares which at the upper end of the price band of ₹166 would result in an offer for sale component of ₹61.75 crore. The fresh issue component of the company IPO will entail the issue of 55,00,000 shares which at the upper end of the price band of ₹166 would result in a fresh issue component of ₹91.30 crore. Therefore, the overall size of the company IPO will entail the issue of 92,20,000 shares which at the upper end of the price band of ₹166 would result in the total issue size of ₹153.05 crore.

Key dates for the Pyramid Technoplast IPO

The issue opens for subscription on 18th August 2023 and closes for subscription on 22nd August 2023 (both days inclusive). The basis of allotment will be finalized on 25th August 2023 and the refunds will be initiated on 28th August 2023. In addition, the demat credits are expected to happen on 29th August 2023 and the stock is scheduled to list on 30th August 2023 on the NSE and the BSE. 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 Pyramid Technoplast Ltd, we already have GMP data for the last 2 days, which should give a reasonable picture of the likely listing performance.

Background to the GMP story of Pyramid Technoplast Ltd

There are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP, which includes the levels of the Nifty and Sensex as well as the general IPO market and macro conditions. Secondly, the extent of subscription for the IPO across the retail and the QIB segments also has a deep impact on the GMP as it is indicative of investor interest in the stock. Generally, strong QIB subscription is a trigger for a spike in GMP.

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 the GMP panned out for Pyramid Technoplast IPO

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 Pyramid Technoplast IPO for which the data is available.

 Date  GMP
29-Aug-2023 ₹22
28-Aug-2023 ₹22
27-Aug-2023 ₹20
26-Aug-2023 ₹20
25-Aug-2023 ₹22
24-Aug-2023 ₹22
23-Aug-2023 ₹21
22-Aug-2023 ₹22
21-Aug-2023 ₹23
20-Aug-2023 ₹23
19-Aug-2023 ₹26
18-Aug-2023 ₹28
17-Aug-2023 ₹24
16-Aug-2023 ₹24
15-Aug-2023 ₹24
14-Aug-2023 ₹19
13-Aug-2023 ₹19
12-Aug-2023 ₹19
11-Aug-2023 ₹19
10-Aug-2023 ₹19
9-Aug-2023 ₹19

In the above case, the GMP trend shows that the grey market premium has opened at around ₹19 per share, and up by ₹22. Of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription on 18th August 2023, 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, Pyramid Technoplast Ltd has shown good traction in the grey market.

If you consider the upper end of the price band of Pyramid Technoplast Ltd at ₹166 as the indicative price, then the likely listing price is being signalled at around ₹185 per share as of the GMP indicator on 10th August 2023. One data point to track will be the subscription update on the stock as that would chart the GMP course from here. As mentioned, the institutional QIB subscription is a key trigger for the GMP pricing.

The GMP of ₹19 on a likely upper band pricing of ₹166 indicates a listing premium of a healthy 11.45% for Pyramid Technoplast Ltd over the listing price. That pre-supposes a listing price of approximately ₹185 per share, when Pyramid Technoplast Ltd lists on 30th August 2023. Of course, these are approximations, so you must keep a margin of safety. However, that would depend on the GMP sustaining over the next few days after the issue opens.

GMP (grey market price) is an important indicator, albeit informal, of likely listing price. One cannot take this price at face value However, the GMP tends to be quite dynamic and changes direction with the flow of news and events. Investors must note here that this is just an informal indication and has no official acceptance. The best thing one can do with the GMP is to observe the trend closely as that gives the best hints on listing status. Focus on the time series trend than on numbers.

Read about Pyramid Technoplast IPO

Brief background of Pyramid Technoplast Ltd

Pyramid Technoplast Ltd, a polymer based specialist manufacturer, was incorporated in the year 1997 to manufacture polymer-based molded products. Better known as Polymer Drums, they are principally used for packaging in industries like chemicals, agrochemicals, specialty chemicals, and pharmaceutical sectors, where in the contained material is volatile or corrosive. Some of its key products include polymer-based bulk packaging drums and Intermediate Bulk Containers (IBC). It also specializes in the manufacture of MS Drums for packaging and transporting of volatile chemicals, agrochemicals, and specialty chemicals. It currently has 6 manufacturing units, of which 4 are located in GIDC, Bharuch while the other 2 are located in Silvassa, Dadra & Nagar Haveli. Pyramid Technoplast Ltd has total polymer drum manufacturing capacity of 20,612 MTPA, IBC manufacturing capacity of 12,820 MTPA and MS Drums manufacturing capacity of 6,200 MTPA. It is currently foraying into building its seventh plant, also located at the Gujarat Industrial Development Corporation (GIDC), Bharuch.

The company is certified by the UN based on the United Nations Recommendation for IBC and MS Drums to meet safety levels. Its business is broadly divided into the IBC Containers vertical, MS Barrels vertical and the Plastic Barrels vertical. Some of the premium clients of Pyramid Technoplast for its polymer based packaging solutions include Gujarat Alkalis & Chemicals Ltd (GACL), Deepak Nitrite, United Phosphorus (UPL), Patanjali Group, Adani Wilmar Ltd, Apar group, Alkyl Amines, Asian Paints and the JSW Group, owned by the Jindal family. The polymer based packaging solution is known to be economical, resistant, and also able to withstand extreme weather conditions. The impressive client list of the company is icing on the cake.

The public issue of Pyramid Technoplast Ltd will be lead managed by PNB Investment Services Ltd and First Overseas Capital Ltd. For stock related shareholder record maintenance, Bigshare Services Private Ltd will be the registrar to the issue.

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About the Author

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


Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
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