QuickTouch Technologies IPO GMP (Grey Market Premium)

Quicktouch Technologies IPO worth Rs. 9.33 crore, comprises entirely of a fresh issue of shares by the company. It is a fixed price IPO and the SME-IPO price of Quicktouch Technologies has been fixed at Rs61 per share. The fresh issue portion entails the issue of 15.30 lakh shares which at the fixed price of Rs61 per share is worth Rs9.33 crore. There is no OFS portion so the entire equity issue would be equity dilutive and it would also be EPS dilutive. As a result of the stake dilution by the fresh issue the share of the promoters of the company would stand reduced, post the IPO, from 89.41% to 65.72%.

The stock of Quicktouch Technologies Ltd has a face value of Rs10 and bidders can only bid in minimum lot size of 2,000 share each, entailing a minimum investment of Rs122,000 in the IPO at the fixed IPO price of Rs61 per share. That is also the maximum that a retail investor would be allowed to bid in the IPO. HNIs and NIIs can bid for minimum of 2 lots of 4,000 shares entailing an investment of Rs244,000. 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 and other non-retail category investors. It is a fixed price issue with the price of Rs61 per share already fixed in advance. Share India Securities Ltd will act as the market maker for the SME IPO of Quicktouch Technologies Ltd. The company has set aside 78,000 shares for the market maker. Share India Capital Services Private Limited will be the lead managers to the issue while Skyline Financial Services Private Limited will be the registrars to the issue.

The issue opens for subscription on 18th April 2023 and closes for subscription on 21st April 2023 (both days inclusive). The basis of allotment will be finalized on 26th April 2023 and the refunds will be initiated on 27th April 2023. In addition, the demat credits are expected to happen on 28th April 2023 and the stock is scheduled to list on 02nd May 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 3-4 days prior to IPO opening and continues till the listing date. In the case of Quicktouch Technologies Ltd, we already have GMP data for the last 2 days, which should give a reasonable picture of the likely listing price, to begin with.

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 Quicktouch Technologies IPO for which data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around Rs. 3, but has since improved to Rs. 20 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 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, Quicktouch Technologies Ltd has shown moderate traction in the grey market.

If you consider the fixed price of the IPO of Quicktouch Technologies Ltd at Rs61, then the likely listing price is being signalled at around Rs64.50 per share as per the GMP indicator on 19th 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.

The GMP of Rs3.50 on the fixed IPO price of Rs61 indicates a listing premium of a moderate to healthy 5.74% for Quicktouch Technologies Ltd over the listing price. That pre-supposes a listing price of approximately Rs64.50 per share, when Quicktouch Technologies Ltd lists on 02nd May 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 purely at the numbers.

Read What you need to know about the Quicktouch Technologies IPO

Quicktouch Technologies Ltd was incorporated in 2013 with focus on providing Software IT Solution and Consulting Services. In addition, it also provides software training modules and website development services for businesses. The company also is active on the design side including Website Designing and Redesigning, iOS App, Android apps, Digital Marketing and Web Hosting Services and other related cloud services. The company is also engaged in Enterprise Resource Planning (ERP), helping businesses through the management of their life cycle. The IPO funds will be predominantly used by the company for working capital needs and for inorganic expansion of business.