RK Swamy IPO shares to make soft landing at D-Street on Tuesday; here's what GMP signals

Shares of RK Swamy are set to make Dalal Street debut on Tuesday, March 12, 2024 and the company may have a soft landing at bourses amid the rising volatility in the broader markets and less-than-expected listing gains for the recent issues. The company, if one goes by the grey market signals, may list at par or even at a mild discount.

Ahead of its listing, shares of RK Swamy were commanding no premium in the grey market. The stock was exchanging hands at a discount of Rs 5-10 per share on its issue price of Rs 28. However, it saw a strong premium of Rs 40 over, suggesting a listing pop of Rs 14-15 per cent to the investors on debut, when the issue was announced for allotment.

Prashanth Tapse, Senior VP Research & Research Analyst at Mehta Equities expects a flat listing for RK Swamy, which received decent subscription demand despite knowing the seasonality and volatility in the business mode. The flat listing is justified due to cyclicality risk and the company being the leading integrated marketing services group in India, he said.

"We believe RK Swamy would get more traction post listing as it would be a pure play for one-stop marketing solutions company getting listed with no apple-to-apple listed peers to compare. Primarily the company is serving the sector which is volatile by nature but the growth has been good in recent years hence the call for allotted investors is 'hold' for long term," he said.

The Chennai-based RK Swamy sold its IPO in the price band of Rs 270-288 per share with a lot size of 50 equity shares, between March 04 and March 06. The company raised Rs 423.56 crore through its primary offering, which included a fresh share sale of up to Rs 173 and an offer-for-sale (OFS) of up to 87,00,000 equity shares.

The issue was overall subscribed only 25.94 times The quota for non-institutional bidders was subscribed 34.36 times while the allocation for qualified institutional bidders was booked 20.58 times. The portion reserved for retail investors was subscribed 34.03 times, while quota for employees saw bidding for 2.52 times by the end of three-day bidding.

"We expect a tepid listing for RK Swamy shares on the back of a muted subscription, close to the issue price," said Dhruv Mudaraddi, Research Analyst at StoxBox. "We advise investors who have received allotment to hold shares from a medium to long term perspective."

The company has posted robust financial performance in the past three years, reflected from its strong revenue and profitability performance. Our sense is that the inherent nature of the digital marketing analytics business is such that it entails higher initial risk followed by a phased replication model upon successful rollout, Mudaraddi said.

RK Swamy has been engaged in the business of integrated marketing communications, customer data analysis, full-service market research and syndicated studies for more than five decades. Incorporated in 1973, RK Swamy is a data-driven, integrated marketing services provider that leverages digital initiatives.

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