Subam Papers IPO Sees Lukewarm Response on Day 1, GMP Signals 23% Premium

Subam Papers IPO, which opened for bidding on September 30, 2024, has seen a subdued response from investors. By 4 PM, the overall subscription rate stood at just 0.36 times. The retail portion was subscribed 0.57 times, while non-institutional investors (NII) booked 0.36 times. Notably, qualified institutional buyers (QIBs) have yet to place any bids, as per exchange data.

Subam Papers is aiming to raise ₹93.70 crore through this public offering, which comprises a fresh issue of 61.65 lakh shares. The price band is set between ₹144 and ₹152 per share, with a face value of ₹10. Investors need to bid for a lot size of 800 shares, with a minimum investment of ₹1,21,600 for retail investors.

The IPO allotment is expected to be finalized by Friday, October 4, 2024. Shares are set to list on the BSE SME platform on Tuesday, October 8, 2024. Gretex Corporate Services Limited is managing the issue, and Bigshare Services Pvt Ltd is serving as the registrar. Gretex Share Broking is the market maker for the IPO. The public issue will close on Thursday, October 3.

GMP Indicates 23% Listing Premium

Currently, the Gray Market Premium (GMP) for Subam Papers IPO is ₹35 per share, suggesting an expected listing price of ₹187, which reflects a 23% premium over the upper issue price of ₹152. However, GMP is only an informal indicator and should not be the sole criterion for making investment decisions.

About Subam Papers

Founded in 2004, Subam Papers is engaged in the manufacturing of Kraft paper and paper products. Initially focused on paper cones, the company expanded its portfolio to include Duplex Board and Kraft Paper. It primarily uses waste paper instead of wood pulp, which is a key material in the production of Kraft paper and Duplex Board.

The company has an installed capacity of 140 metric tons per day (MTPD) for Duplex Board, amounting to 47,200 tons annually. For the year ending March 31, 2024, Subam Papers achieved a utilization of 43,963 tons, a significant increase from the previous year’s 30,393 tons.

The Kraft paper production capacity stands at 300 MTPD, with an annual capacity of 93,600 tons. During FY24, the utilization was 93,081 tons, compared to 83,691 tons in FY23 and 82,371 tons in FY22, as per the company’s DRHP filing.