Vishnusurya Projects and Infra IPO GMP (Grey Market Premium)

The ₹50.00 crore IPO of Vishnusurya Projects and Infra Ltd comprises entirely of a fresh issue with no offer for sale (OFS) component in the IPO from promoters and early shareholders. It is a fixed price issue and the fixed price of the IPO has been set at ₹68 per share. The fresh issue portion of the IPO entails the issue of 73.53 lakh shares which at the fixed IPO price of ₹68 per share is worth ₹50.00 crore. Since there is no OFS component in the IPO, the fresh issue size of ₹50.00 crore is also the size of the overall IPO.

How to apply for the Vishnusurya Projects and Infra IPO

The stock of Vishnusurya Projects and Infra Ltd has a face value of ₹10 and bidders can only bid in minimum lot size of 2,000 share each, entailing a minimum investment of ₹136,000 in the IPO at the fixed IPO price of ₹68 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 4,000 shares entailing an investment of ₹272,000. The table below captures the lot sizes permissible.

Out of the total shares on offer, the company is likely to allocate around 5% shares for the market maker for providing liquidity post listing and reducing basis risk. The net offer (net of market maker allocation) will be distributed between the retail investors and the HNI / NII investors. The table below captures the gist of the IPO allocation to various categories.

In the above table it is evident that the size of the market making inventory and the name of the market maker is still not announced. However, the normal allocation to market makers is between 5% and 5.2%. The net offer i.e., net of the market making portion, is being allocated equally to the retail and non-retail investors. The non-retail investors are predominantly the HNI / NII investors.

About Vishnusurya Projects and Infra 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 Vishnusurya Projects and Infra Ltd, we already have GMP data for the last 4 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 Vishnusurya Projects and Infra IPO for the which data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹30, but now down by ₹8. Of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription on 29th 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, Vishnusurya Projects and Infra Ltd has shown good traction in the grey market.

If you consider the fixed IPO price of Vishnusurya Projects and Infra Ltd at ₹68, then the likely listing price is being signalled at around ₹98 per share as per the GMP indicator on 25th 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 fixed IPO price of ₹68 indicates a listing premium of a healthy 44.12% for Vishnusurya Projects and Infra Ltd over the listing price. That pre-supposes a listing price of approximately ₹98 per share, when Vishnusurya Projects and Infra Ltd lists on 12th 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.

Read about Vishnusurya Projects and Infra IPO

Brief on Vishnusurya Projects and Infra Ltd

Vishnusurya Projects and Infra Ltd was incorporated in 1996 and is engaged in mining of rough stones and manufacturing of sand using crushing plants and sand washing plants. Vishnusurya Projects and Infra Ltd operates 3 business verticals. The first vertical is the EPC division offering property development for commercial spaces like offices, industrial parks, factories, and warehouses; apart from residential houses. The mining vertical operates two quarries in Tamil Nadu. It has a blue metal mining quarry and crushing facility for rock breaking and rock auguring operations. In addition, it also has a unit for manufactured sand, equipped with a crushing machine capable of handling 350 tonnes and 150 tonnes of sand washing. The third, and much smaller vertical is the business of drones or unarmed aerial vehicles. Vishnusurya Projects and Infra Ltd is an accredited Class-I contractor with various departments in Tamil Nadu like the Greater Chennai Corporation, Government of Tamil Nadu Water Resources Department, Tamil Nadu Water Supply and Drainage Board etc.

The company has been promoted by Bhavani Jayaprakash. The promoter holding in the company currently stands at 88.74%. However, post the fresh issue of shares, the promoter equity holding share will get diluted to 62.23%. The fresh issue funds will be used by the company for funding the working capital gaps and for repayment / prepayment of certain outstanding borrowings of the business. Some part will also be allocated towards general corporate purposes. While Khandwala Securities Ltd will be the lead manager to the issue, Cameo Corporate Services Ltd will be the registrar to the issue. The market maker for the issue and the market maker inventory is yet to be announced officially.