The initial public offering (IPO) of Bai Kakajee Polymers witnessed a powerful start, with its institutional investor portion getting fully booked in less than two hours after opening on Tuesday, December 23. The strong initial demand underscores the appeal of this small and medium enterprise (SME) issue, which is also commanding a significant premium in the unofficial grey market.
IPO Details and Fund Utilisation
The ₹105 crore SME IPO is completely a fresh issue of 0.57 crore shares. The company has set a price band of ₹177 to ₹186 per share. Investors can bid in lots of 600 shares, meaning retail participants must apply for a minimum of two lots, translating to an investment of ₹2,23,200 at the upper price limit.
The company plans to utilise the net proceeds from the offering for several specific purposes. A major chunk, ₹64 crore, is earmarked for repayment of borrowings. Furthermore, ₹9.85 crore will fund the installation of additional plant and machinery, and ₹12.94 crore is allocated for setting up a power plant. The remaining amount will be used for general corporate purposes.
Subscription Status and Grey Market Premium (GMP)
By 11:50 AM on the first day of bidding, the overall issue was subscribed 1.01 times. The breakdown revealed varied interest: the retail portion was booked 2%, while the non-institutional investor (NII) quota had not yet seen bids. The standout performance came from the qualified institutional buyer (QIB) segment, which was subscribed 3.50 times, leading to the rapid fill-up of their allocation.
Adding to the positive sentiment is a sharp rise in the grey market premium (GMP). The Bai Kakajee Polymers IPO GMP jumped to ₹15 from ₹8 earlier. This indicates that the company's shares are unofficially trading at a ₹15 premium over the issue price. At this GMP level, the projected listing price stands at around ₹201, which would represent a premium of approximately 8.06% over the upper end of the price band.
Timeline and Company Background
The IPO will remain open for subscription until December 26. The basis of allotment is expected to be finalised on December 29. If all goes as planned, investors can expect the shares to list on the BSE SME platform on December 31, the final day of the calendar year.
Bai Kakaji Polymers is engaged in the manufacturing and trading of plastic and polymer-based products. Its specialization lies in producing plastic granules, PET preforms, and plastic caps and closures. These components are critical for industries like packaged drinking water, carbonated beverages, juices, and dairy products. The company operates from four manufacturing units located in Latur, Maharashtra, spanning a total area of 33,000 square meters.
Disclaimer: This news article is for informational purposes only. The views and market data mentioned are from external analysts and sources. Readers are strongly advised to consult with certified investment experts before making any financial decisions, as market conditions are subject to change.
