New Swan Multitech Limited has recently launched its Initial Public Offering (IPO) for subscription, which is open until Monday, January 15. The IPO price range is set at ₹62 to ₹66 per share, with a lot size of 2,000 shares.
Retail investors are required to contribute a minimum of ₹1.32 lakh, given the minimum lot size. High Net Worth Individuals (HNIs) can bid for a minimum of two lots, totaling 4,000 shares, and a maximum investment of ₹2.64 lakh.
The IPO allocation includes 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Investors. New Swan Multitech specializes in manufacturing precision-engineered parts and components for the modern farming and automobile industries.
The company’s product range includes various automotive components such as engine hangers, fuel filler cap components, main stand complete assemblies, and more for two-wheeler vehicles. The IPO details indicate a fresh issue of 5,016,000 equity shares, with no Offer for Sale (OFS) component.
The net proceeds from the IPO will be utilized for capital expenditures, repayment of certain borrowings, working capital requirements, and general corporate purposes. The promoters of the company are Kanwardeep Singh, Upkar Singh, and Barunpreet Singh Ahuja.
The subscription status on the first day is 9.77 times, with positive responses from retail investors and non-institutional buyers. The Grey Market Premium (GMP) is +37, suggesting that New Swan Multitech shares are trading at a premium of ₹37 in the unofficial market. Based on this, the estimated listing price is ₹103 per share, representing a 56.06% increase from the IPO price.
However, some concerns have been raised about the sustainability of boosted margins from FY23 onwards. The company’s diversified business in the automotive and agricultural sectors and its clientele with improved margins contribute to a reasonably priced IPO.
Investors are advised to consider the medium to long-term potential of the company before making investment decisions. This information comes from Dilip Davda, the contributing editor at Chittorgarh.
