Vishnu Prakash R Punglia IPO GMP (Grey Market Premium)

Vishnu Prakash R Punglia IPO worth ₹308.88 crore comprises entirely of a fresh issue of shares. There is no offer for sale (OFS) component 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 ₹94 to ₹99 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 indicative price.

Key details of the Vishnu Prakash R Punglia IPO

Let us now look at the details of the issue of Vishnu Prakash R Punglia IPO. The fresh issue component of the company IPO will entail the issue of 3,12,00,000 shares (3.12 crore shares), which at the upper end of the price band of ₹99 would result in a new issue component value of ₹3.8.88 crore. In this case, there is no OFS portion. Therefore, the overall size of the company IPO will also entail the issue of 3,12,00,000 shares which at the upper end of the price band of ₹99 would result in the total issue size of ₹308.88 crore. In the absence of OFS, the fresh issue portion also represents the total issue size.

The issue opens for subscription on 24th August 2023 and closes for subscription on 28th August 2023 (both days inclusive). The basis of allotment will be finalized on 31st August 2023 and the refunds will be initiated on 01st September 2023. In addition, the demat credits are expected to happen on 04th September 2023 and the stock is scheduled to list on 05th September 2023 on the NSE and the BSE.

About Grey Market Price (GMP) trading in Vishnu Prakash R Punglia IPO

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 Vishnu Prakash R Punglia Ltd, we already have GMP data for the last 3 days, which should give a reasonable picture of the likely listing performance.

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.

Vishnu Prakash R Punglia IPO GMP (Grey Market Premium)

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 Vishnu Prakash R Punglia IPO for which the data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹42 per share, but has drifted steadily to the ₹54 levels in the last 3 days. Of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription on 24th 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, Vishnu Prakash R Punglia Ltd has shown good traction in the grey market.

If you consider the upper end of the price band of Vishnu Prakash R Punglia Ltd at ₹99 as the indicative price, then the likely listing price is being signalled at around ₹139 per share as of the GMP indicator on 21st 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 ₹40 on a likely upper band pricing of ₹99 indicates a listing premium of a healthy 40.40% for Vishnu Prakash R Punglia Ltd over the listing price. That pre-supposes a listing price of approximately ₹139 per share, when Vishnu Prakash R Punglia Ltd lists on 05th September 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 Vishnu Prakash R Punglia IPO

Brief background of Vishnu Prakash R Punglia Ltd

Vishnu Prakash R Punglia Ltd was incorporated in 1986 to undertake designing and constructing infrastructure projects. The company implemented infrastructure projects for the Central and State Governments; apart from autonomous bodies. It has operational presence in 9 States and 1 Union territory in India. Its business verticals can be classified into 4 categories viz. Water Supply Projects (WSP), Railway Projects, Road Projects, and Irrigation Network Projects. The company is having accreditation with various government departments and agencies as a contractor, which facilitates the process of bidding for projects and getting a favourable outcome. Vishnu Prakash R Punglia Ltd is current accredited by Jodhpur Development Authority, Public Health Engineering Department, Rajasthan, Water Resources Department, Rajasthan, Roads and Building Department, Gujarat, South Western Command, Military Engineering Services (MES) etc.

The company has recently forayed into 3 additional related business verticals. Vishu Prakash R Punglia Ltd has ventured into the tunnel business with the government thrust on infrastructure. The company drills and maintains tunnels for hydropower projects, railway passage, metro rail, roads, and highways in India. It looks to capture lucrative growth opportunities in the tunnel sector. The second foray is into warehousing projects, especially for storage of food grains and other perishable materials. The company has executed several independent warehouse projects. Finally, Vishnu Prakash R Punglia Ltd has also forayed into sustainable sewerage projects. Sewerage projects are made sustainable, cost-effective, and low-maintenance. Vishu Prakash R Punglia Ltd also provides end-to-end wastewater management solutions.

The public issue of Vishu Prakash R Punglia Ltd will be lead managed by Choice Capital Advisors Private Ltd and Pantomath Advisors Private Ltd as the book running lead managers to the issue. For managing shareholder records, Link Intime India Private Ltd will be the registrar to the issue.