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The IPO season continues to sizzle, and today’s spotlight is on VMS TMT Ltd., the Ahmedabad-based manufacturer of Thermo Mechanically Treated (TMT) bars. With its Rs 149 crore public issue opening for subscription on September 17, the company has already stirred strong investor interest, thanks to a grey market premium (GMP) of 23 percent and a fully subscribed book within hours of launch.
Here’s a comprehensive breakdown of what’s driving the buzz—and whether it’s worth your bid.
1. IPO Structure and Key Details
- VMS TMT’s IPO is a fresh issue of 1.5 crore equity shares, aiming to raise up to Rs 148.5 crore
- The price band is set between Rs 94 and Rs 99 per share
- Investors can apply for a minimum of 150 shares, translating to Rs 14,850 at the upper price band
- The issue is open from September 17 to September 19, with allotment expected on September 22 and listing on September 24 on both NSE and BSE
- Arihant Capital Markets is the book-running lead manager, and KFin Technologies is the registrar
2. Subscription Status: Day One Surge
- The IPO was fully subscribed within hours of opening, reflecting strong demand across categories
- Qualified Institutional Buyers (QIBs) led the charge, subscribing 6.83 times their allotted quota
- Non-Institutional Investors (NIIs) followed with 1.38 times subscription
- Retail Individual Investors (RIIs) subscribed to 84 percent of their allocation by mid-day
- Overall subscription stood at 1.8 times as of 10:30 AM on Day One
This early momentum suggests robust institutional confidence and retail curiosity, often a precursor to strong listing performance.
3. Grey Market Premium: What the GMP Signals
- The current GMP stands at Rs 23 per share, indicating a potential listing price of Rs 122
- This translates to a 23 percent premium over the upper IPO price band of Rs 99
- While GMP is unofficial and speculative, it often reflects market sentiment and expected demand on listing day
A high GMP typically attracts short-term investors looking for listing gains, though it’s not a guarantee of long-term performance.
4. Business Profile and Financials
- Incorporated in 2013, VMS TMT manufactures TMT bars used in construction and infrastructure projects
- The company also deals in scrap and binding wires, primarily within Gujarat
- It operates a manufacturing facility in Ahmedabad, with plans to expand capacity and geographic reach
- In FY25, VMS TMT reported a profit after tax of Rs 14.74 crore, up 9.4 percent year-on-year
- However, revenue declined 11.77 percent to Rs 770.2 crore from Rs 872.96 crore in FY24
The financials show modest profitability but a dip in topline growth, which may raise questions about scalability and demand cycles.
5. Use of Proceeds and Strategic Intent
- The IPO proceeds will be used for debt repayment and general corporate purposes
- Reducing leverage could improve margins and operational flexibility
- The company is also expected to invest in technology upgrades and distribution expansion
This signals a conservative but focused growth strategy, aimed at strengthening fundamentals before scaling aggressively.
6. Should You Apply: Weighing the Pros and Cons
Pros:
- Strong early subscription, especially from QIBs
- Attractive GMP suggesting listing gains
- Presence in a core infrastructure sector with long-term demand potential
- Debt reduction could improve financial health
Cons:
- Declining revenue may indicate cyclical or competitive pressures
- Limited geographic footprint and product diversification
- GMP is speculative and may not reflect post-listing performance
For retail investors, this IPO may appeal to those seeking short-term gains, but long-term investors should assess the company’s growth trajectory and sector dynamics more closely.
Sources: Economic Times, Moneycontrol, NDTV Profit
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