MPK Steels IPO Set for BSE SME Debut After Lukewarm Response
MPK Steels' Rs 25.74 crore IPO received a mixed response with an overall subscription rate of 1.54 times. QIBs showed strong interest with 19.95 times subscription, while NIIs and retail investors subscribed at 0.65 and 0.58 times respectively. The grey market premium is at Rs 0, suggesting a listing near the issue price of Rs 79. The company, specializing in structural steel products, plans to use the IPO proceeds for new machinery, a solar power plant, and working capital. MPK Steels reported a total income of Rs 208.03 crore and nearly doubled its profit after tax to Rs 6.05 crore in the latest year.
*this image is generated using AI for illustrative purposes only.
MPK Steels (India) is poised to make its debut on the BSE SME platform following a tepid response to its Initial Public Offering (IPO). The Rs 25.74 crore IPO garnered mixed interest from different investor categories, reflecting the current market sentiment towards small and medium enterprises.
Subscription Details
The overall subscription rate for the MPK Steels IPO stood at 1.54 times, with varying levels of interest across investor categories:
| Investor Category | Subscription Rate |
|---|---|
| Qualified Institutional Buyers (QIBs) | 19.95 |
| Non-Institutional Investors (NIIs) | 0.65 |
| Retail Investors | 0.58 |
The strong response from QIBs contrasts sharply with the lukewarm interest from retail and non-institutional investors, highlighting a divergence in market perception.
Grey Market and Listing Expectations
The grey market premium for MPK Steels stands at Rs 0, suggesting that the stock may open near its issue price of Rs 79 per share. This indicates a cautious market sentiment towards the company's listing.
Company Overview
MPK Steels specializes in manufacturing structural steel products catering to various sectors:
- Railways
- Telecom
- Power
- Automotive
- Construction
- Infrastructure
Operating from Jaipur, the company serves multiple states, positioning itself as a key player in the structural steel industry.
Financial Performance
MPK Steels has demonstrated strong financial growth:
| Financial Metric | Amount (in Rs crore) |
|---|---|
| Total Income | 208.03 |
| Profit After Tax (Latest Year) | 6.05 |
| Profit After Tax (Previous Year) | 3.11 |
The company has nearly doubled its profit after tax compared to the previous year, showcasing significant improvement in its financial performance.
IPO Proceeds Allocation
The funds raised from the IPO will be utilized for various purposes:
| Purpose | Amount (in Rs crore) |
|---|---|
| New Machinery and Dies | 2.65 |
| Solar Power Plant Installation | 7.00 |
| Working Capital Requirements | 9.18 |
This allocation indicates the company's focus on expanding its production capabilities, embracing sustainable energy solutions, and strengthening its working capital position.
Investor Outlook
The mixed response to the IPO, particularly the low retail and NII subscription rates, suggests a cautious approach from individual investors. However, the strong interest from institutional investors could be seen as a positive sign for the company's long-term prospects.
As MPK Steels prepares for its market debut, investors will be closely watching its performance on the BSE SME platform. The company's ability to leverage its IPO proceeds effectively and continue its growth trajectory will be crucial in determining its future market performance and investor sentiment.
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