Remus Pharmaceuticals IPO GMP (Grey Market Premium)

Remus Pharmaceuticals IPO, worth Rs.47.69 crore comprises entirely of a fresh issue of the said amount. The price band has been fixed in the range of Rs1,150 to Rs1,229. The fresh issue portion entails the issue of 3.88 lakh shares which at the upper end of the price band at Rs1,229 is worth Rs47.69 crore. Overall, the IPO entails the issue of 3.88 lakh shares, which at the upper price band of Rs1,229 per share works out to total issue size of Rs47.69 crore, since the fresh issue accounts for the entire IPO size.

The stock of Remus Pharmaceuticals Ltd has a face value of Rs10 and bidders can only bid in minimum lot size of 100 share each, entailing a minimum investment of Rs122,900 in the IPO at the upper end of the price band of Rs1,229 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 200 shares entailing an investment of Rs245,800. 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. Sunflower Broking Private Ltd will act as the market maker for the SME IPO of Remus Pharmaceuticals Ltd. The company has set aside 19,500 shares for the market maker.

The issue opens for subscription on 17th May 2023 and closes for subscription on 19th May 2023 (both days inclusive). The basis of allotment will be finalized on 24th May 2023 and the refunds will be initiated on 25th May 2023. In addition, the demat credits are expected to happen on 26th May 2023 and the stock is scheduled to list on 29th 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 4-5 days prior to IPO opening and continues till the listing date. In the case of Remus Pharmaceuticals 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.

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 Remus Pharmaceuticals IPO for which the data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around Rs. 118, but it is now up by Rs. 575 on the second day on 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, Remus Pharmaceuticals Ltd has shown good traction in the grey market.

If you consider the upper end of band price of the IPO of Remus Pharmaceuticals Ltd at Rs1,229, then the likely listing price is being signalled at around Rs1,351 per share as per the GMP indicator on 12th May 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 Rs122 on the upper end of the book built IPO price of Rs1,229 indicates a listing premium of a healthy 9.93% for Remus Pharmaceuticals Ltd over the listing price. That pre-supposes a listing price of approximately Rs1,351 per share, when Remus Pharmaceuticals Ltd lists on 29th 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 on numbers.

Read What you must know about the Remus Pharmaceuticals IPO
 

Remus Pharmaceuticals Ltd, is an SME IPO on the NSE which is opening for subscription on 17th May 2023. Incorporated in 2015; and the company is engaged in the marketing and distributing of finished formulations of pharmaceutical drugs. Its first major product is Active pharmaceutical ingredients (APIs); which I the biologically active component of a drug product. These are inputs that go into generic drugs. The second category is Finished Pharmaceutical Formulations (FPFs); which are therapeutic drugs available in different dosage forms entailing higher value addition.

Remus Pharmaceuticals has a portfolio of 429 products, with 295 products registered in a total of 13 countries and about 134 products at different stages of registration process. Remus has presence in 20 countries and caters to generic distributors and also to regional distributors. The fresh issue portion will be used to fund its inorganic growth and working capital needs. The issue will be lead managed by Beeline Capital Advisors Private Limited while Link Intime India Private Ltd will be the registrars to the SME IPO of Remus Pharmaceuticals Ltd.