New Swan Multitech IPO: Issue oversubscribed on day one on strong retail and NII interest; GMP stable

New Swan Multitech's IPO opened for subscription today (Thursday 11 January) and closes on Monday 15 January. The price range for New Swan Multitech's IPO has been set in the range of ₹62 to ₹66 each, according to primary market experts. The lot size of the New Swan Multitech IPO consists of 2,000 shares. Since the minimum lot size for an application is 2,000 shares, private investors must make at least one contribution ₹1.32 lakh. The minimum bid amount for HNIs is two lots or 4,000 shares, with a maximum investment of ₹2.64 lakh.

The New Swan Multitech IPO has not more than 50% of the shares of the public issue reserved for Qualified Institutional Buyers (QIB), not less than 15% for Non-Institutional Investors (NII) and not less than 35% of the offering is reserved for Private investors.

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Modern agriculture and the automotive industry are the two industries in which New Swan Multitech Limited specializes in manufacturing precision engineered parts and components.

The company offers a wide range of automotive products such as: Such as engine hangers, hinge housing covers, fuel cap components, front cover strut components, center stand assemblies, skid plates, rear brake arm assemblies, bleeders, cable management assemblies, battery tray components and numerous other important parts for two-wheeled vehicles.

Also Read: Jyoti CNC Automation IPO Day 3: GMP, Subscription Status, More Details. Apply or not?

The basis for allotment of shares in New Swan Multitech's IPO is expected to be finalized on Tuesday, January 16 and the company will issue refunds on Wednesday, January 17 while the shares will be deposited in demat account on the same day be credited to the allottee. Shares of New Swan Multitech are expected to list on the BSE SME on Thursday, January 18.

According to the company's Red Herring Prospectus (RHP), the company's listed competitors are Sansera Engineering Limited (with a P/E ratio of 36.64), Endurance Technologies Limited (with a P/E ratio of 52.95) and JBM Auto Limited (with a P/E ratio of 52.95). /E from 136.03).

The company's revenue for FY23 is ₹151.16 crr and its EBITDA is ₹20.22 cr. The PAT was 9.91 cr and ROCE was 24.86%. In FY23, automotive components accounted for 60% of sales while agricultural equipment contributed 37%.

New Swan Multitech IPO details

New IPO from Swan Multitech that is worthwhile ₹33.11 crore, is an all-new issue of 5,016,000 shares; According to RHP, there is no OFS (Offer for Sale) component.

The net proceeds shall be utilized as follows: to fund capital expenditure for purchase of specific machinery for the Company's current manufacturing unit at Raian, Ludhiana; to repay a portion of certain loans taken out by the company; to meet working capital needs; and for general corporate purposes.

Kanwardeep Singh, Upkar Singh and Barunpreet Singh Ahuja are the promoters of the company.

The registrar for the IPO of New Swan Multitech is Bigshare Services Pvt Ltd and the underwriters are Hem Securities Limited and Share India Capital Services Private Limited.

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New subscription status for Swan Multitech's IPO

The subscription status for New Swan Multitech's IPO is 9.77 times on the first day so far. The issue received positive response from retail investors whose share was subscribed 6.54 times and non-institutional buyers whose share was subscribed 2.61 times, as per data available on chittorgarh.com. The qualified institutional buyers (QIBs) share is booked 1.07 times.

According to chittorgarh.com, the company has received offers for 1,37,80,000 shares against 14,10,000 shares on offer at 11:35 IST.

New Swan Multitech IPO GMP today

Today's New Swan Multitech IPO GMP or gray market premium is +37, similar to the previous three sessions. This suggests that New Swan Multitech's share price was trading at a premium of ₹37 on the gray market, according to investorgain.com.

Taking into account the upper end of the IPO price range and the current gray market premium, the estimated listing price of the New Swan Multitech share has been included ₹103 per piece, which is 56.06% higher than the IPO price of ₹66.

“Gray market premium” indicates investors’ willingness to pay more than the issue price.

Also Read: Fund Raising for IPO Expected to Surpass ₹4.15 Lakh Crore this year: Kotak Investment Banking

Evaluation of New Swan Multitech's IPO

“The company operates in various business areas in the automotive and agricultural sectors. The company has loyal customers and has seen increasing margins from FY23. The sustainability of these margins remains a concern. The issue appears to be priced appropriately given the annual super gains for FY24. “Investors can invest funds for medium to long-term returns,” said Dilip Davda, Editor, Chittorgarh.

Also Read: Jyoti CNC Automation IPO: 10 Key Risks Investors Should Know Before Subscribing to the Issue

Disclaimer: The above views and recommendations are those of individual analysts, experts and brokerage firms, not Mint. We recommend investors consult certified experts before making an investment decision.

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