VMS TMT shares list at 6% premium over IPO price after 102x subscription

The shares of VMS TMT made a decent market debut on September 24, listing at Rs 105 per share on BSE. This marks a premium of more than 6 percent over the IPO price of Rs 99 apiece.

After the market debut, the shares dropped 5 percent to hit the lower circuit at Rs 99.75 apiece. The stock is now only marginally higher than its IPO price.

On NSE, the shares listed slightly lower at Rs 104.90 apiece. The stock's market capitalisation at debut stood at over Rs 521 crore.

Listing premium lower than grey market estimates:

The listing premium is however lower than the grey market estimates. Ahead of listing, the unlisted shares of the company were trading with more than 11 percent grey market premium (GMP) over the IPO price, according to data on Investorgain.

VMS TMT IPO subscribed 102x:

The maiden public issue of the company had seen strong investor interest during its three days of public bidding, being subscribed more than 102 times between September 17 and September 19. Non-institutional investors (NII) led the subscription numbers, booking their reserved portion over 227 times. Qualified institutional buyers (QIB) subscribed the portion kept for them around 121 times, while retail investors booked their reserved portion nearly 48 times.

Key details about VMS TMT IPO:

The company had moved to the capital markets to raise Rs 148.50 crore through an entirely fresh issue of 1.5 crore equity shares at a price band of Rs 94-99 per share. Investors could bid for a minimum of 150 shares, requiring an investment of Rs 14,850, and in multiples thereafter.

Half of the IPO was reserved for retail investors, while 30 percent was kept for QIBs and remaining 20 percent was for NIIs.

How will IPO proceeds be used?

VMS TMT, which predominantly operates in Gujarat and markets its products under the 'Kamdhenu' brand, plans to use Rs 115 crore from IPO proceeds for repayment of certain borrowings. The remainder funds will be used for general corporate purposes. As of June this year, the total borrowings amounted to Rs 261.7 crore, the company said.

Should you buy, sell or hold?

Listing of VMS TMT at a modest 6 percent premium over the IPO price indicates a good and not exuberant listing, especially vis-a-vis ultra high subscription figures of over 102 times, said Master Capital Services.

"Investors may wait-and-watch with the stock performance likely being a function of how quickly the VMS TMT achieves operational efficiency and increases marketplace dominance," it added."The listing provides moderate upside but also exposure to downside risk.

Investor may consider booking partial profits early and Hold the remainder with a stop-loss of Rs 90 per share," said Shivani Nyati, Head of Wealth at Swastika Investmart.

With TMT bars being central to construction, the high investor interest in the IPO reflects a bullish trend for real estate development, said Siddharth Maurya, Founder & Managing Director at Vibhavangal Anukulakara. "The listing at a 6% premium further indicates market euphoria," he added.

About the company:

The company manufactures TMT bars from scrap and billets at its manufacturing facility in Bhayla Village, Ahmedabad, with installed capacity of 2 lakh metric tonnes per annum.

VMS TMT reported mixed financial performance in the financial year 2024-25 with profit growing 14.5 percent to Rs 15.4 crore but revenue falling 11.8 percent to Rs 770.2 crore compared to previous year.

The company had filed draft papers for IPO on March 27 this year, which were cleared by the SEBI on July 21 this year. Arihant Capital Markets acted as the sole book running lead manager for the VMS TMT IPO.

Also read: Our LIVE blog on stock market updatesDisclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.