New Swan Multitech lists at 90% premium at Rs 125 per share on the BSE and hits the upper circuit

New Swan Multitech Limited is engaged in the manufacturing of precision-engineered components and parts mainly for the automotive industry and modern farming, debuted on the Indian stock market today.

Upon its debut on the NSE, the stock opened at Rs 125.40 per share, reflecting an 90% premium compared to the final issue price of Rs 66 per share. Furthermore, the stock has hit the upper circuit price limit of 5%, and currently, no sellers are willing to sell the stock, ultimately leaving the buyers disappointed. Currently the stock is at Rs 131.67 per share and the market capitalisation of the company stands at Rs 250.39 crore.

IPO Proceeds 

The company intends to use the net proceeds from the Fresh Issue for the following purposes: Funding the capital expenditure for the purchase of specific machinery for the existing manufacturing unit located in Raian, Ludhiana; Repayment of certain borrowings; Funding of working capital requirements; and General corporate purposes.

Company profile

New Swan Multitech Limited is engaged in the manufacturing of precision-engineered components and parts for two sectors: the automotive industry and modern farming.

The company’s product portfolio for the automotive industry includes assembly engine hangers, hinge body covers, front cover stays components, fuel filler cap components, main stand complete assemblies, engine guard plates, rear brake arm assemblies, separator breathers, cable guide assemblies, battery tray components, and many other parts that are crucial for two-wheeler vehicles.

In addition, they design and manufacture various types of brackets, such as cooling recovery reservoir brackets, exhaust tailpipe brackets, fuse block brackets, floor panel brackets, and passenger car air cleaner inlet hose brackets.

Subscription details: 

On January 15, 2024, the final day of the IPO window, the IPO witnessed an impressive response, with a subscription rate of 384.26 times. The public issue received remarkable interest, with the retail category being subscribed 388.23 times, the QIB category achieving a subscription rate of 110.69 times, and the NII category reaching a subscription rate of 739.72 times.

The company attracted Rs 9.42 crore from various anchor investors by allocating 14.28 lakh equity shares at Rs 66 per share. The complete lock-in period for these anchor investors ends on May 30, 2024.

The IPO price range was set between Rs 62 and Rs 66, with a face value of Rs 10 per share and a lot size of 2000 shares. The total size of the company’s IPO was Rs 33.11 crore, and the final share issue price was fixed at Rs 66 each.

Financial Performance:

Conclusion: 

The key dilemma for investors lies in whether to hold onto their shares. Those who applied for the IPO solely intending to capitalise on listing gains have earned an impressive 99.5% return over its final issue price on the listing day itself. Investors who applied for the IPO purely for listing gains may consider closing their positions. Conversely, investors with a higher risk tolerance might opt to hold onto their shares for the medium to long term, as this strategy could potentially yield benefits over time.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.