Premium Plast made its debut on the NSE SME today, listing its shares at ₹51.45 each, reflecting a modest 5% premium over its initial public offering (IPO) price of ₹49. The SME IPO was valued at ₹26.20 crore and was open for subscription from October 21 to October 23, 2024, with a price range set between ₹46 and ₹49 per share.
IPO response and oversubscription details
Despite the muted listing, the IPO saw a robust response from investors, achieving an impressive oversubscription rate of 38 times. The retail investor segment particularly stood out, being oversubscribed 65 times, while the non-institutional portion was oversubscribed by 19.56 times. The Qualified Institutional Buyer (QIB) segment also demonstrated significant interest, being booked 6.74 times, according to exchange data.
Use of funds from the IPO
Premium Plast plans to utilise the net proceeds from the IPO for various strategic initiatives. Key areas of share market investment include expanding its existing manufacturing facility in Pithampur, Madhya Pradesh, purchasing new machinery, and funding capital expenditures for setting up a rooftop grid solar power plant at the current manufacturing site. Additionally, the funds will be used for prepaying or repaying a portion of certain outstanding borrowings, covering general corporate expenses, and meeting offer-related costs.
About Premium Plast
Premium Plast is a Tier-1 supplier that directly serves original equipment manufacturers (OEMs) in the automotive components sector. The company specialises in designing, manufacturing, and supplying a range of exterior plastic components, interior cabin parts, and under-the-hood components tailored for commercial vehicle OEMs.
The company produces a wide array of injection- and blow-moulded plastic items across various industries and applications. Its product offerings encompass automotive parts, plastic industrial components, and moulded packaging, serving a diverse range of markets.
Within the automotive manufacturing space, Premium Plast employs advanced injection and blow moulding techniques to create various components, including exterior automotive parts, interior components, steering wheels, and other specialised parts.
Originally established to manufacture automotive components for multiple OEMs, the company has since diversified its portfolio to include industrial plastic parts and moulded packaging solutions. In the first nine months of FY24, automotive plastic components (both injection and blow moulding) accounted for 84% of its revenue, while industrial plastic parts and moulded packaging contributed 9% and 7%, respectively, according to the company’s DRHP report.
Conclusion
While the initial listing at ₹51.45 indicates a modest premium, it highlights the strong demand for Premium Plast shares during the subscription period. For those considering share market investment, this IPO serves as an example of how investor interest can significantly exceed the available shares, even if the listing performance appears subdued. As the company implements its growth strategies and expands its manufacturing capabilities, it could present a promising opportunity for future returns in the share market investment landscape.
As always, investors should carefully assess their share market investment choices, considering the performance trends and potential growth of companies like Premium Plast.
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