Rocking Deals Circular Economy IPO GMP (Grey Market Premium)

Rocking Deals Circular Economy IPO opens for subscription on 22nd November 2023 and closes for subscription on 24th November 2023; both days inclusive. The stock of the company has a face value of ₹10 per share and it is a book building issue. The issue price for the fresh issue IPO has been fixed in the price band of ₹136 to ₹140 per share and the final price will be discovered within this range. Rocking Deals Circular Economy IPO has only a fresh issue component with no book built portion. As part of the fresh portion of the IPO, Rocking Deals Circular Economy Ltd will issue a total of 15,00,000 shares (15 lakh shares), which at the upper IPO band price of ₹140 per share aggregates to a total fund raising of ₹21.00 crore. Since there is no offer for sale portion, the size of the fresh issue will also double up as the total size of the IPO. Thus, the total IPO size will comprise of 15.00 lakh shares, which at the upper price band of ₹140 per share will aggregate to ₹21.00 crore.

Like every SME IPO, this IPO also has a market making portion with a market maker portion allocation of 85,000 shares. The market maker for the issue is SS Corporate Services Private Ltd and they will provide two-way quotes to ensure liquidity on the counter and low basis costs post listing. The promoters of Rocking Deals Circular Economy Ltd currently hold 88.45% stake in the company but this will get diluted to 65.00% post the IPO. The company will use the fresh issue funds for working capital needs and for brand positioning, marketing, and advertisement; apart from general corporate expenses. Corporate Capital Ventures Private Ltd will be the lead manager to the issue, and Bigshare Services Private Ltd will be the registrar to the issue.

About Rocking Deals Circular Economy 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 Rocking Deals Circular Economy 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 Rocking Deals Circular Economy IPO for which the data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹55, but has gone up by ₹90 for which GMP data is available. Of course, we have to await for the actual subscription numbers to flow in after the issue opens for subscription on 22nd November 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, Rocking Deals Circular Economy Ltd has shown good traction in the grey market.

If you consider the upper band price of the IPO of Rocking Deals Circular Economy Ltd at ₹140 per share, then the likely listing price is being signalled at around ₹195 per share as per the GMP indicator on 21st November 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 ₹55 on the upper band IPO price of ₹140 indicates a listing premium of a healthy 39.29% for Rocking Deals Circular Economy Ltd over the IPO issue price. That pre-supposes a listing price of approximately ₹195 per share, when Rocking Deals Circular Economy Ltd lists on 30th November 2023. Of course, these are purely 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 the absolute numbers.

How to apply for the Rocking Deals Circular Economy IPO?

The minimum lot size for the IPO investment will be 1,000 shares. Thus, retail investors can invest a minimum of ₹140,000 (1,000 x ₹140 per share) in the IPO. That is also the maximum that the retail investors can invest in the IPO. HNI / NII investors can invest a minimum of 2 lots comprising of 2,000 shares and having a minimum lot value of ₹280,000. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The table below captures the break-up of lot sizes for different categories.

Rocking Deals Circular Economy Ltd has allocated 5.67% of the issue size for the market makers to the issue, SS Corporate Services Private Ltd. The net offer (net of market maker allocation) will be divided between the qualified institutional buyers (QIBs), retail investors and the HNI / NII investors. The breakdown of the overall IPO of Rocking Deals Circular Economy Ltd in terms of the allocation to various categories are captured in the table below.

The issue opens for subscription on 22nd November 2023 and closes for subscription on 24th November 2023 (both days inclusive). The basis of allotment will be finalized on 28th November 2023 and the refunds will be initiated on 29th November 2023. In addition, the demat credits are also expected to happen on 29th November 2023 and the stock is scheduled to also list on 30th November 2023 on the NSE SME segment.

The stock of Rocking Dale Circular Economy Ltd will list on the Trade-to-Trade segment of the NSE-SME board with ISIN Code (INE0PTR01012) under the (ST) segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated.