ARC Insulation Makes Strong Debut on NSE SME Platform with 48% Grey Market Premium
ARC Insulation's Rs 41.19 crore IPO received an overall subscription of 18.71 times, with strong interest across investor categories. The issue is trading at a 48% grey market premium, suggesting a potential listing price of Rs 185 per share. The company, specializing in glass fiber reinforced polymer products, reported a revenue of Rs 33.15 crore and a profit after tax of Rs 8.57 crore, with impressive margins and return on equity. IPO proceeds will fund expansion and working capital needs.
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ARC Insulation and Insulators Set for Promising NSE SME Debut
ARC Insulation and Insulators is set to make a notable entrance on the National Stock Exchange (NSE) Small and Medium Enterprise (SME) platform, with investors showing significant interest in the company's initial public offering (IPO).
IPO Details and Subscription
The company's Rs 41.19 crore public issue, which concluded its subscription period from August 21-25, garnered substantial attention from various investor categories:
- Fresh issue: Rs 38.06 crore
- Offer for sale: Rs 3.13 crore
- Overall subscription: 18.71 times
- Retail quota subscription: 17.27 times
- Non-institutional investors subscription: 26.84 times
- Qualified institutional buyers subscription: 15.12 times
The anchor book successfully raised Rs 11.71 crore, further solidifying investor confidence in the company.
Grey Market Premium and Listing Expectations
The IPO is currently trading at a grey market premium of 48% over the upper price band of Rs 125. This indicates strong listing expectations, with the share price potentially opening near Rs 185 per share.
Company Overview and Financial Performance
Founded in 2008, ARC Insulation specializes in glass fiber reinforced polymer products catering to various sectors including construction, infrastructure, power, marine, and chemical industries.
The company has demonstrated robust financial performance:
| Metric | Value | Year-on-Year Growth |
|---|---|---|
| Revenue | Rs 33.15 crore | 15% |
| Profit After Tax | Rs 8.57 crore | 40% |
| EBITDA Margin | 38.20% | - |
| PAT Margin | Above 26% | - |
| Return on Equity | 45.50% | - |
Utilization of IPO Proceeds
The funds raised through the IPO will be allocated towards:
- Capital expenditure for a new manufacturing unit
- Office spaces
- Debt repayment
- Working capital requirements
With its strong financial performance and the positive response to its IPO, ARC Insulation appears poised for a promising debut on the NSE SME platform.
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