Saakshi Medtech and Panels IPO GMP (Grey Market Premium)

The ₹45.16 crore IPO of Saakshi Medtech and Panels Ltd comprises entirely of a fresh issue with no offer for sale (OFS) component in the IPO from promoters and early shareholders. The price band has been fixed in the range of ₹92 to ₹97 per share and the final price will be discovered in this band via book building. The fresh issue portion of the IPO entails the issue of 46.56 lakh shares which at the upper end of the price band at ₹97 is worth ₹45.16 crore. Since there is no OFS component in the IPO, the fresh issue size of ₹45.16 crore is also the size of the overall IPO.

How to apply for the Saakshi Medtech and Panels IPO

The stock of Saakshi Medtech and Panels IPO has a face value of ₹10 and bidders can only bid in minimum lot size of 1,200 share each, entailing a minimum investment of ₹116,400 in the IPO at the upper end of the price band of ₹97 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 2,400 shares entailing an investment of ₹232,800. 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. It is captured in the table below.

Saakshi Medtech and Panels IPO (SME) 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 Hem Finlease, who will act as the market maker for the SME IPO of Saakshi Medtech and Panels Ltd. The company has set aside 2,35,200 shares for the market maker.

The issue opens for subscription on 25th September 2023 and closes for subscription on 27th September 2023 (both days inclusive). The basis of allotment will be finalized on 03rd October 2023 and the refunds will be initiated on 04th October 2023. In addition, the demat credits are expected to happen on 05th October 2023 and the stock is scheduled to also list on 06th October 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 Saakshi Medtech and Panels 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 Saakshi Medtech and Panels 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 Saakshi Medtech and Panels IPO for which the data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹30, but now its down by ₹25 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 25th 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, Saakshi Medtech and Panels Ltd has shown good traction in the grey market.

If you consider the upper end of band price of the IPO of Saakshi Medtech and Panels Ltd at ₹97, then the likely listing price is being signalled at around ₹127 per share as per the GMP indicator on 21st September 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 ₹30 on the upper end of the book built IPO price of ₹97 indicates a listing premium of a healthy 30.93% for Saakshi Medtech and Panels Ltd over the listing price. That pre-supposes a listing price of approximately ₹127 per share, when Saakshi Medtech and Panels Ltd lists on 06th October 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.

Brief on Saakshi Medtech and Panels Ltd

Saakshi Medtech and Panels Ltd was incorporated in 2001 and the company designs, programs and assembles Electrical Control Panels and Cabinets. These include microcontrollers, programmable logic controllers, and SCADA systems. Such electrical control panels are typically used in elevators, air compressors, at EV charging stations and in the oil & gas exploration industry. The products of Saakshi Medtech and Panels Ltd also find application in the medical X-ray systems, fabrication work for locomotives etc. The company currently has 3 manufacturing units located at Pune in Maharashtra spread across 9,600 square metres (SQM). The company is the recipient of several awards and accolades in this space. Its revenue growth has bene robust in the last 3 years.

The company was promoted by Aniket Vijay Latkar and Chitra Vijay Latkar. The promoter holding in the company currently stands at 100.00%. However, post the fresh issue of shares, the promoter equity holding share will get diluted to 73.63%. The fresh issue funds will be used by the company for funding its capex at Factory Unit II and for repayment of borrowings of the company. Part of the funds will also go towards meeting its working capital needs and for general corporate expenses. While Hem Securities 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 Hem Finlease Ltd.