Syrma SGS IPO GMP falls; last day to subscribe to Rs 840 crore public issue

Syrma SGS IPO GMP falls; last day to subscribe to Rs 840 crore public issue

Syrma SGS Technology IPO entered the final day of bidding today after having already been oversubscribed by investors. The Rs 840 crore public issue opened for subscription last week after having garnered decent interest from anchor investors. Syrma SGS public issue has seen all investor categories oversubscribe their portions except Qualified Institutional Buyers (QIB). In the unlisted space, the premium for Syrma SGS Technology shares has fallen to Rs 30-35 per share. The grey market premium at the start of the week stood at just Rs 15 per share but was at Rs 40 apiece yesterday.

The overall subscription of Syrma SGS Technology IPO has reached 2.27 times with bids coming in for 6,48,39,020 equity shares against the 2,85,63,816 equity shares on offer. Retail investors were the first to fully subscribe their portion. Ahead of the final day of bidding, the retail portion of the IPO has been subscribed 2.66 times. Bids in the retail category have come for 3,72,90,384 equity shares against the 1,40,07,027 shares on offer. Non-Institutional Investors (NII) have also oversubscribed their portion of Syrma SGS IPO. NII portion has been subscribed 3.58 times as bids came in for 2,15,10,100 equity shares while only 60,03,012 shares have been offered. QIBs were largely missing until yesterday but now the subscription of the category stands at 0.71 times. 

Grey market premium of Syrma SGS Technology was hovering around Rs 30-35 per share on Thursday. The premium in the grey market had increased from Rs 15 last week to Rs 40 yesterday but has now trimmed some gains.

The Syrma SGS IPO remains open for subscription today. Investors can bid for the issue in the fixed price band of Rs 209-220 per share, in a bid lot of 68 shares. The public issue is largely a fresh issue of equity shares accompanied by an Offer for Sale (OFS). The engineering and design company’s issue is priced at 50.7x at FY22EPS of Rs 3.2/share based on fully diluted post issue of equity, on the higher end of the price band, according to analysts at ICICI Direct. The brokerage firm has no rating on the issue. 

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Analysts at Geojit Financial Services have a ‘Subscribe’ rating. “At the upper price band of Rs 220, SSTL is available at a P/E of 50.7x (FY22), which is available at a discount to its peers. Considering its good peer financial performance, strong focus on R&D, capacity expansion plans, positive industry outlook with government support through PLI schemes and China plus one strategy of multinational companies, we assign a “Subscribe” rating for the issue on a medium to long term basis,” they said.