Sah Polymers is likely to deliver a decent listing pop to the investors, despite the volatility in the listed space, if one goes by the signals from the grey market. The issue may break the jinx of flat listing for the mainboard companies at Dalal Street.
Sah Polymers' premium in the unofficial market has been steady shrugging the wild swings in the broader markets, said the analysts tracking the grey markets.
Sah Polymers is commanding a premium of Rs 8-10 in the grey markets, which is about 12-15 per cent higher than its issue price of Rs 65 apiece, hinting decent gains for the investors getting the allotment.
According to analysts tracking the market, the issue appears to be heavily subscribed due to its small size. However, they find the valuations to be pricey considering the growth potential of the company.
The expected listing price for Sah Polymers, considering the issue price of Rs 65, is Rs 75 and could give listing gains of 15 per cent, said Manish Khanna, co-founder, Unlisted Assets
"Considering business is fully priced, has low moats, and less visibility of future growth, and considering opportunities available in the listed markets are at better valuations, investors can exit post listing and reallocate capital," he suggests.
Incorporated in 1992, Sah Polymers is primarily engaged in manufacturing and selling of Polypropylene (PP)/High-Density Polyethylene (HDPE) FIBC Bags, Woven Sacks, HDPE/PP woven fabrics and woven polymer.
With a good subscription rate and a current grey market premium, Sah Polymers is expected to have a positive listing, said Santosh Meena, Head of Research, Swastika Investmart.
"It relies on a limited number of clients, and the issue size was also small. The market for polymers is anticipated to reach $790 billion by 2027, expanding at a CAGR of 5.5 per cent from 2022 to 2027," he said.
Abhay Doshi, co-founder at UnlistedArena said that subscription numbers are apparently inflated considering the small issue size of the company. "There are not many moats for the company to boost the future growth."
Sah Polymers is headed for decent listing gains but market sentiments remain volatile, he said.
Sah Polymer's Rs 66.30 crore IPO was hit among the investors as the issue was subscribed 17.46 times during the four-day bidding process between December 30, 2022 and January 4, 2023. The company sold shares in the range of Rs 61-65.
The quota reserved for retail bidders was subscribed a whopping 39.78 times in the four-day bidding process. The quota reserved for non-institutional buyers fetched 32.69 times bids. The allocations for institutional bidders were booked 2.4 times.
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