Paramount Speciality Forgings IPO Lists at ₹83 on NSE SME, Surges 40.67% Over Issue Price

Paramount Speciality Forgings Limited, a manufacturer of steel forgings for various industrial applications, made a strong debut on the Indian stock market on 25th September 2024, with its shares listing at a significant premium to the issue price. The company's initial public offering (IPO) had generated robust demand from investors during its subscription period, setting the stage for an impressive market debut.

Listing Details

• Listing Price: Paramount Speciality Forgings shares were listed at ₹83 per share on the NSE SME platform, marking a strong start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a substantial premium over the IPO issue price. Paramount Speciality Forgings had set its IPO price band from ₹57 to ₹59 per share, with the final issue price being fixed at the upper end of ₹59.
• Percentage Change: The listing price of ₹83 on the NSE SME translates to a premium of 40.67% over the issue price of ₹59.

First-Day Trading Performance

• Opening vs. Latest Price: Following its strong opening, Paramount Speciality Forgings' share price continued to rise. By 10:29 AM, the stock was trading at ₹87.15, up 5% from its opening price and 47.71% above the issue price.
• Market Capitalisation: As of 10:29 AM, the company's market capitalisation stood at ₹171.53 crore.
• Trading Volume: The traded volume was 22.02 lakh shares with a traded value of ₹18.64 crore, indicating significant investor interest on the first day of listing.

Market Sentiment and Analysis

• Market Reaction: The market reacted overwhelmingly positively to Paramount Speciality Forgings' listing. The strong listing premium indicates robust demand and investor confidence in the company's prospects.
• Subscription Rate: The IPO was oversubscribed by 73.88 times, with NIIs leading at 220.24 times subscription, followed by retail investors at 41.35 times, and QIBs at 20.88 times.
• Grey Market Premium: Prior to listing, shares were trading at a premium of ₹17 in the grey market, which was significantly surpassed at listing.

Growth Drivers and Challenges

Expected drivers of future performance:

• Experienced management team
• Focus on quality and process optimisation
• Long-term customer relationships
• Effective branding and digital marketing activities

Potential challenges:

• Highly competitive and fragmented sector
• Potential volatility in raw material prices

Utilisation of IPO Proceeds

Paramount Speciality Forgings plans to use the funds for:

• Capital expenditure for expansion at the Khopoli Plant
• General corporate purposes

Financial Performance

The company has demonstrated growth:

• Revenue increased by 1% to ₹11,363.62 lakh in FY2024 from ₹11,224.1 lakh in FY2023
  Profit After Tax (PAT) rose by 163% to ₹725.36 lakh in FY2024 from ₹275.84 lakh in FY2023

As Paramount Speciality Forgings begins its journey as a listed entity, market participants will closely monitor its ability to leverage its manufacturing expertise and customer relationships to drive future growth and shareholder value. The strong listing and impressive subscription rates suggest positive market sentiment towards the company's prospects in the specialised steel forgings sector.