Pramara Promotions IPO lists at 76.19% premium, then hits upper circuit

Strong listing for Pramara Promotions IPO, and gains further

Pramara Promotions IPO had a strong listing on 13th September 2023, listing at a sharp premium of 76.19%, but subsequently gaining further ground and closing at the 5% upper circuit over the listing price. Of course, the stock closed comfortably above the IPO issue price and the listing price for the day. In a sense, the markets had a positive trading day on September 13th 2023, as the Nifty gained 76 points and closed at 20,070 levels. It was a decisive close above the psychological 20K mark for the Nifty. In the midst of such a strong day for the markets overall, the stock of Pramara Promotions Ltd listed at strong premium of 76.19% and to add to the positive sentiments on the counter, it went on to hit the 5% upper circuit on the listing price for the day.

The stock of Pramara Promotions Ltd did show a lot of strength on opening and also managed to hold higher. The positive sentiments on the Nifty only helped the stock to close higher for the day. The stock closed above the IPO issue price and also above the listing price of the day to close at 5% upper circuit on the listing price of the stock. Being an NSE SME IPO, it is only traded on the SME segment of NSE. Pramara Promotions Ltd opened 76.19% higher and the opening price turned out to be tad above the low price for the day. With subscription of 17.14X for the retail portion and 33.99X for the HNI / NII portion; the overall subscription was relatively healthy at 25.71X. The subscription numbers were strong enough to allow the stock to list at a huge premium, on a day when the market sentiments were very positive for the Nifty in terms of levels.

Stock closes Day-1 at substantial premium and holds on

Here is the pre-open price discovery for the Pramara Promotions IPO on the NSE.

Data Source: NSE

The SME IPO of Pramara Promotions Ltd was priced at a fixed IPO price of ₹63 per share via the fixed pricing format. On 13th September 2023, the stock of Pramara Promotions Ltd listed on the NSE at a price of ₹111.00, a premium of 76.19% on the IPO issue price of ₹63. However, the stock faced pressure during the day and did dip below the listing price, although it did manage to bounce back sharply from lower levels and scale towards the upper circuit of the day. The stock of Pramara Promotions Ltd closed the listing day at a price of ₹116.55, which is 85% above the IPO issue price and 5% above the listing price of the stock on the first day of listing. In a nutshell, the stock of Pramara Promotions Ltd had closed the day exactly at the upper circuit price for the stock of 5% with only buyers and no sellers. Like the upper circuit price, even the lower circuit price on listing day is calculated on the listing price and not on the IPO price. The opening price actually turned out to be very close to the central tendency for the day, with the stock oscillating in early trades.

How prices traversed for Pramara Promotions IPO on listing day

On Day-1 of listing i.e., on 13th September 2023, Pramara Promotions Ltd touched a high of ₹116.55 on the NSE and a low of ₹105.55 per share. The high price of the day was exactly the closing price of the stock while the stock listing price was actually halfway between the low price and the high price of the day. Incidentally, the closing price represented the 5% upper circuit price of the stock for the day, which is the maximum that the SME IPO stock is allowed to move in the day. What is truly appreciable is that the stock closed strong despite the stock price being fairly volatile in the day. Of course, the strong sentiments on the Nifty helped matters as the Nifty closed above the psychological level of 20,000. The stock closed at the 5% upper circuit with 30,000 buy quantity and no sellers. For the SME IPOs, 5% is the upper limit and also the lower circuit on the listing price on the day of listing.

Robust volumes for Pramara Promotions IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Pramara Promotions Ltd stock traded a total of 16.60 lakh shares on NSE SME segment amounting to value of ₹1,867.67 lakhs on the first day.  The order book during the day showed a lot of buying with the buy orders consistently exceeding the sell orders at any point of time. That also led the stock to close at the upper end of the circuit filter. It must be noted here that Pramara Promotions Ltd is in the trade to trade (T2T) segment so only delivery trades are possible on the stock. Hence the entire volume for the day purely represents the delivery volumes.

At the close of Day-1 of listing, Pramara Promotions Ltd had a market capitalization of ₹105.30 crore with free-float market cap of ₹31.79 crore. It has a total of 90.35 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 16.60 lakh shares during the day is accounted for only by delivery trades.

Brief on the business model of Pramara Promotions Ltd

Pramara Promotions Ltd is a promotional marketing agency, incorporated in the year 2006. It is engaged in the business of ideation, conceptualization, designing manufacturing and marketing of promotional products and gift items. It caters to clients across industry groups including, FMCG (fast moving consumer goods), QSR (quick service restaurants), pharma, beverage companies, cosmetics, telecom, media, and a lot more. Pramara Promotions Ltd offers very niche services to these companies including cross promotions, loyalty and reward tabulation, corporate gifting, sweepstakes promotions etc. The company also arranges to manufacture products under an OEM arrangement, wherein the company makes products like water bottles, pens, and other gift items under an outsourcing agreement with another manufacturer. These are white labelled manufacture where the products are appropriately branded with the company's logo or design and used as strategic promotional merchandise or marketing collateral.

Pramara Promotions Ltd has, till date, designed and manufactured over 5,000 products. The company has also expanded its product offerings and has recently launched proprietary brands like "Toyworks" and "Tribeyoung". As of July 2023, the Pramara Promotions Ltd has staff strength of 83 employees. Some of its key strengths in the business include its existing track record, strong franchise with corporate customers, ability to manufacture and deliver cost effective and high quality solutions and fairly stringent quality control and production standards. It is also into digital gifting ideas, which are growing in importance and appeal in the current market, especially the younger clients.

The company has been promoted by Rohit Lamba and Sheetal Lamba. The promoter holding in the company currently stands at 95.41%. However, post the fresh issue of shares as part of the IPO, the promoter equity holding share will reduce to 69.81%. The fresh issue funds will be used by the company for meeting its working capital funding gaps and for general corporate expenses. While Fedex Securities Private Ltd will be the lead manager to the issue, Bigshare Services Private Ltd will be the registrar to the issue. The market maker for the issue is Pure Broking Ltd, which will offer buy and sell quotes on the counter to maintain liquidity and ensuring reduced basis risk in trading the stock.