Chitty Schemes

On Door Concepts IPO GMP

On Door Concepts Ltd’s IPO will open for subscription on October 23, 2023, and close on October 27, 2023. This is a fixed price IPO with a face value of Rs 10 per share and a fixed IPO price of Rs 208 per share. On Door Concepts Ltd’s IPO consists of only a new issue component and no book-building component. Under the fresh issue tranche of the IPO, On Door Concepts Ltd will issue a total of 14,98,800 equity shares (approximately 14.99 million shares), taking the fresh issue size to Rs 31.18 million at a fixed IPO price of Rs 208 per share. Since there is no sale component, the newly issued shares are also equivalent to the total amount of the IPO. Therefore, the total IPO size will be 14,98,800 shares, taking the total IPO size to Rs 31.18 crore at the fixed IPO price of Rs 208 per share.

Like any SME IPO, On Door Concepts Ltd’s offering will also have a market making component. The number of shares placed by the market maker is 86,400 shares, and the market maker of this issuance is BHH Securities Ltd. Market makers provide two-way quotations to ensure liquidity after over-the-counter quotations and low basic costs. Promoter stake in On Door Concepts Ltd currently stands at 51.92 per cent, which will be diluted to 38.14 per cent post-IPO. On Door Concepts Ltd will also use the new funds to fund additional working capital expenditures as well as general corporate expenses. First Overseas Capital Ltd is the lead manager for the issue and Bigshare Services Private Ltd is the registrar for the issue.

About the GMP pricing for On Door Concepts Ltd Solutions

Gray Market Price (GMP) trading typically begins around 4 to 5 days before an IPO opens and continues until the listing date. In the case of On Door Concepts’ IPO, we already have the last two days of GMP data, which should provide a reasonable idea of ​​a possible listing.

There are two factors that affect GMP. First of all, market conditions have a great impact on GMP, especially the liquidity of the market. Secondly, IPO subscription size has a significant impact on GMP as it indicates investor interest in the stock. Technically, GMP could also be negative, meaning the stock is trading at a discount to the issue price.

There is a small point to note here. GMP is not an official price point, just a popular informal price point. However, in most cases it is considered a good informal indicator of IPO supply and demand. Therefore, it can provide a rough idea of ​​what the listing might look like and how the stock will perform post-IPO.

How is GMP going these days?

GMP generally reflects real stock conditions very well. GMP trends over time are a better indication of which way the wind is blowing than actual prices. Here’s a quick summary of On Door Concepts Ltd’s GMP for the two days that data is available

In the above case, GMP trends show that the gray market premium started at about Rs 25 but has now increased by Rs 30. Of course, after the issuance on October 23, 2023, we still have to wait for the actual subscription number to arrive, and we must also pay attention to the progress, because this will have a great impact on GMP. In the past, oversubscribed stocks at IPOs have also experienced very significant positive shifts in their prices on the gray market. Firstly, On Door Concepts Ltd has had good success in the gray market.

If you consider the fixed price of On Door Concepts IPO at Rs 208 per share, then the likely listing price on October 17, 2023, as per GMP metrics, would be around Rs 233 per share. This is dynamic and constantly changing. One data point to track is subscription updates for shares as this will reflect the GMP price.

Against a fixed IPO price of Rs 208, the GMP of Rs 25 implies a listing premium of 12.02% above the IPO issue price for On Door Concepts Ltd. Assume that when On Door Concepts Ltd is listed on November 6, 2023, the stock market price is around Rs 233 per share. Of course, these are only approximations, so you need to maintain a safety margin. One must pay close attention to GMP trends as this provides the best indication of listing status. Look at trends in time series rather than absolute numbers.

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How to apply for On Door Concepts Ltd Solutions IPO

The minimum lot size for IPO investment is 600 shares. Therefore, retail investors can invest a minimum of Rs 124,800 (Rs 600 x Rs 208 per share) in the IPO. This is also the maximum amount that small and medium-sized investors can invest in an IPO. HNI/NII investors can invest in a minimum of 2 lots of 1,200 shares each with a minimum lot value of Rs 249,600.

Subject to preferential terms and conditions; 5.76% of the total issuance is reserved for market makers, 47.12% of the issuance is reserved for HNI/NII investors, and the remaining 47.12% is reserved for retail investors. Since this is a fixed-price offering and the IPO price has been determined in advance, On Door Concepts Ltd. has no price decision in this issue.

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As with any SME IPO, there is a market maker in the On Door Concepts Ltd IPO. Market makers usually provide bid and ask prices after listing to ensure the liquidity of the stock and low basis risk. In this case, the creator is BHH Securities Ltd, which acted as market maker for the On Door Concepts Ltd SME IPO. Function. The company has reserved 86,400 shares for market makers.

The current subscription period starts from October 23, 2023 to October 27, 2023 (both dates inclusive). The allocation basis will be determined on November 1, 2023, and refunds will be initiated on November 2, 2023. Additionally, demat credit is expected to occur on November 3, 2023 and the stock is also scheduled to be listed on the NSE SME segment on November 6, 2023. Unlike the main board, this is the target market for small and medium enterprise (SME) IPOs.

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