IKIO Lighting, a lighting solutions company, is set to launch its Initial Public Offering (IPO) worth ₹607 crore. The IPO comprises both an offer for sale (OFS) and a fresh issue of shares. The OFS involves the transfer of shares by the company's promoters and early shareholders, while the fresh issue component injects new funds into the company but may dilute earnings per share and equity.
The IPO has been priced in the
range of ₹270 to ₹285 per share. The final IPO allotment price will be
determined through a book-building process. In this analysis, the upper end of
the price band is considered.
The details of the IKIO Lighting
IPO reveal that the offer for sale involves 90,00,000 shares, which, at the
upper price band of ₹285, amounts to ₹257 crore. Additionally, the fresh issue
component consists of 1,22,80,702 shares, resulting in an offer for sale
component of ₹350 crore at the upper price band. Therefore, the overall IPO
size will include the issuance of 2,12,80,702 shares, totaling ₹607 crore at
the upper price band.
The subscription for the IPO
opens on June 6, 2023, and closes on June 8, 2023. The basis of allotment will
be finalized on June 13, 2023, followed by refunds initiated on June 14, 2023.
Demat credits are expected to take place on June 15, 2023, and the stock is
scheduled to be listed on June 16, 2023, on both the NSE and BSE.
Grey market price (GMP) trading
typically begins a few days before the IPO opens and continues until the
listing date. The GMP is influenced by market conditions, including Nifty and
Sensex levels, as well as overall IPO market sentiment and macroeconomic
factors. The level of subscription across retail and Qualified Institutional
Buyer (QIB) segments also impacts the GMP, indicating investor interest in the
stock. Strong QIB subscription often leads to an increase in GMP.
The GMP serves as an informal
gauge of demand and supply for the IPO and can provide insights into the likely
listing performance of the stock. It reflects market sentiment and trends over
time. Based on available data, here is a summary of the GMP for the IKIO
Lighting IPO:
Date | GMP
06-Jun-23 | ₹103
05-Jun-23 | ₹95
04-Jun-23 | ₹73
03-Jun-23 | ₹73
02-Jun-23 | ₹50
The GMP trend indicates that the
grey market premium opened at ₹50 and has now risen to ₹103. However, the
actual subscription numbers during the IPO will have a significant impact on
the GMP. Historically, oversubscribed IPOs have seen a positive shift in the
grey market pricing, indicating robust investor interest. IKIO Lighting Ltd has
shown good traction in the grey market.
Assuming the upper end of the
price band at ₹285, the GMP suggests a listing price of around ₹380 per share
as of June 5, 2023. Tracking the subscription update during the IPO will
provide a clearer picture of the GMP's trajectory. Institutional QIB
subscription is a crucial factor influencing GMP pricing.
The GMP of ₹95, considering the
upper price band of ₹285, indicates a healthy listing premium of 33.33% for
IKIO Lighting Ltd. This implies a listing price of approximately ₹380 per share
when the stock lists on June 16, 2023. These are approximations, so it's
advisable to exercise caution. The sustainability of the GMP in the coming days
after the IPO opens will be a key factor to monitor.
While the GMP is an important,
albeit informal, indicator of the likely listing price, it should not be taken
at face value. It tends to be dynamic and reacts to news and events. Investors
should view it as an informal indication and focus on the trend over time
rather than specific numbers.
Established in 2016, IKIO
Lighting Ltd specializes in LED lighting solutions. LED lights have gained
popularity due to their long-term cost-effectiveness and lower carbon
footprint, supported by government initiatives. The company's product portfolio
includes LED lighting, refrigeration lights, ABS piping, and other related
products.
IKIO Lighting primarily operates
in the Original Design Manufacturer (ODM) segment. It designs, develops,
manufactures, and supplies products to customers who further distribute them
under their own brands or white-label brands. The company's products
predominantly cater to the high-margin premium segment and encompass lighting,
fittings, fixtures, accessories, and components.
The IPO is being managed by
Motilal Oswal Investment Advisors Private Limited, with KFIN Technologies
serving as the registrars to the issue.
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