Unlisted shares of R K Swamy Ltd are trading Rs 40 higher in the grey market, expecting a 13.89 per cent listing gain from the public issue
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R K Swamy IPO: The initial public offer of integrated marketing services firm R K Swamy, which is going to be closed on March 6, has received a decent subscription from investors. Till 11:51 am on the final day of bidding on Wednesday, March 6, the Rs 423.56-crore IPO received 8.55 times subscription garnering bids for 7,03,84,300 shares as against 82,32,946 shares on offer.
The category for retail individual investors (RIIs) received 23.83 times subscription while the portion for non-institutional investors got subscribed 15.53 times. The quota for Qualified Institutional Buyers (QIBs) fetched 41 per cent subscription.
R K Swamy IPO GMP Today
According to market observers, unlisted shares of R K Swamy Ltd are trading Rs 40 higher in the grey market as compared with its issue price. The Rs 40 grey market premium or GMP means the grey market is expecting a 13.89 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
R K Swamy IPO: Should You Subscribe?
Assigning the ‘Subscribe for long term’ rating to the IPO, brokerage firm Anand Rathi in its note said, “At the upper price band company is valued at P/E (price-earnings) ratio of 46.5 of its FY23 earnings with a market cap of ₹1,453 crore post issue of equity shares and return on net worth of 22.2%.”
It added, “We believe that the valuation of the company is fairly priced and recommend a ‘Subscribe-Long Term’ rating to the IPO.”
It also said the organisation stands as a prominent integrated marketing service group in India, providing a comprehensive solution encompassing creative, media, data analytics, and market research services under one roof. Over the past five decades, they have achieved organic growth by adeptly responding to market trends and evolving client needs.
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Reliance Securities in its note also recommended “Subscribe for long term”. It said RK Swamy’s longstanding customer relationships with government companies and agencies to create awareness about its policies, promote various new initiatives, health and educations schemes, state wise marketing services are the key positives.”
The company’s strong management helps to tap domestic and global customers in various segments of industries as private companies spend around 3% of their revenues for product endorsement which will drive sustained growth for the coming years.
“We believe with improvement in margins, newer cities and innovative campaigns in digital medium improving the overall customer experience helps to build brands leveraging the success for clients. Hence, we recommend to ‘Subscribe’ the issue for long term,” it said.
R K Swamy IPO Details
The initial public offer (IPO) has a fresh issue of up to Rs 173 crore and an offer for sale component of up to 87,00,000 equity shares. The IPO has a price range of Rs 270-288 a share.
RK Swamy Ltd on Friday said it has collected Rs 187 crore from anchor investors.
Funds raised through the fresh issue would be used for setting up a digital video content production studio, establishing new customer experience centres and computer-aided telephonic interview centres as well as for general corporate purposes.
Also, funds would be utilised for investment in the IT infrastructure development of RK Swamy Ltd and its subsidiaries Hansa Research and Hansa Customer Equity.
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RK Swamy Ltd is the largest Indian majority-owned integrated marketing services provider in India, offering a single-window solution for creative, media, data analytics, and market research services.
SBI Capital Markets, IIFL Securities and Motilal Oswal Investment Advisors are the managers to the offer.
