RK Swamy IPO shares: RK Swamy’s shares are poised to enter Dalal Street on Tuesday, March 12, 2024, with expectations of a modest arrival amidst heightened market volatility and muted listing gains for recent offerings. According to signals from the grey market, the company may debut at par or possibly even at a slight discount.
Before its listing, RK Swamy’s shares were not commanding any premium in the grey market. The stock was being traded at a discount of Rs 5-10 per share compared to its issue price of Rs 28. However, it witnessed a significant premium of Rs 40 later on, indicating a potential listing gain of Rs 14-15 percent for investors upon debut, as announced during the allotment of shares.
Prashanth Tapse, Senior VP of Research & Research Analyst at Mehta Equities, anticipates a stagnant listing for RK Swamy. Despite acknowledging the seasonal and volatile nature of the business model, the company garnered decent subscription demand. Tapse attributes the flat listing expectation to the inherent cyclicality risk and RK Swamy’s position as the foremost integrated marketing services group in India.
We anticipate that RK Swamy will gain more momentum post-listing, given its status as a pure-play for a one-stop marketing solutions company with no directly comparable listed peers. The company primarily operates in a volatile sector, but its growth has been robust in recent years. Therefore, our recommendation for allotted investors is to ‘hold’ for the long term, he stated.
RK Swamy, headquartered in Chennai, conducted its IPO with a price range of Rs 270-288 per share and a lot size of 50 equity shares, spanning from March 4 to March 6. The company garnered Rs 423.56 crore through its primary offering, comprising a fresh share issuance of up to Rs 173 and an offer-for-sale (OFS) of up to 87,00,000 equity shares.
The overall subscription for the issue stood at 25.94 times. Non-institutional bidders subscribed to their quota by 34.36 times, while qualified institutional bidders secured a subscription of 20.58 times. Retail investors subscribed to their portion by 34.03 times, and the employees’ quota saw bidding reaching 2.52 times by the end of the three-day bidding period.
Dhruv Mudaraddi, a Research Analyst at StoxBox, anticipates a lackluster listing for RK Swamy shares due to subdued subscription levels, likely around the issue price. He recommends investors who have been allotted shares to hold them with a medium to long-term perspective.
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Mudaraddi highlighted that the company has demonstrated strong financial performance over the past three years, evident from its robust revenue and profitability. He suggests that the digital marketing analytics business involves higher initial risk but follows a phased replication model upon successful rollout.
For over five decades, RK Swamy has been involved in integrated marketing communications, customer data analysis, full-service market research, and syndicated studies. RK Swamy, founded in 1973, is an integrated marketing services provider driven by data and employing digital initiatives.
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