The upcoming IPO of Shyam Dhani Industries is creating buzz among investors, with a significant grey market premium of 67% ahead of its opening on Monday. This attention is noteworthy, especially considering it's one of the highest among SME IPOs this month.
The Rs 38.49 crore IPO is an entirely fresh issue, priced between Rs 65 to Rs 70 per share. At the upper end of this price range, the company's valuation stands at approximately Rs 144.6 crore. In the unofficial market, the stock is being quoted at a premium of nearly Rs 40-45 over the issue price, indicating expectations of a strong listing debut if market sentiment remains favorable.
Shyam Dhani Industries is an ISO-certified manufacturer and marketer of spices and grocery products, known for its 'Shyam' brand. The company processes over 160 varieties of spices and trades in multiple products, including black salt, rock salt, rice, and seasoning mixes. Its products are sold across various channels, including general trade, modern retail, quick commerce platforms, HoReCa, and exports, with its manufacturing facility based in Jaipur, Rajasthan.
The IPO structure includes a retail lot size of 2,000 shares, which translates to a minimum investment of Rs 2.8 lakh at the upper price band. Notably, ahead of the public issue, the company secured Rs 10.92 crore from anchor investors, which should help anchor demand for the offering.
Financially, Shyam Dhani Industries has demonstrated steady growth over the years. In FY25, revenue saw a 16% year-on-year increase to Rs 124.75 crore, while profit after tax rose by 28% to Rs 8.04 crore. The EBITDA margins were about 11.7%, and the return on equity was over 41%.
The funds raised from the IPO will primarily be used to finance capital expenditure, including the purchase of new machinery, the installation of a solar rooftop system, partial repayment of existing borrowings, and to meet incremental working capital requirements.
While the high grey market premium indicates strong speculative interest, market participants are cautioning that SME listings can be volatile post-debut, especially given the uneven performance of SME IPOs this year.
Remember, this is a perspective based on current market trends and should not be considered as investment advice. It's always advisable to do your own research before making any investment decisions.
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