June 7, 2024
New Delhi, India
High Demand for Magenta Lifecare IPO
The Magenta Lifecare IPO, which opened on June 5 and closes on June 7, has seen an overwhelming response from investors. By day 3, the IPO was oversubscribed by an astonishing 450.76 times, reflecting immense investor interest.
IPO Details and Investor Demand
The price band for the Magenta Lifecare IPO is set at ₹35 per share, with a lot size of 4,000 shares. This means retail investors must invest a minimum of ₹1.4 lakh, while High Net-worth Individuals (HNIs) need to invest at least ₹2.8 lakh for two lots. The IPO garnered full subscription within hours of its opening, underscoring its high demand across all investor categories.
Subscription Breakdown
- Overall Subscription: 450.76 times
- Retail Portion: 474.34 times
- NII Portion: 413.81 times
- Total Bids Received: 85,46,36,000 shares against 18,96,000 shares on offer
Company Profile and Financial Performance
Magenta Lifecare manufactures foam-based products like mattresses and pillows under the brand name “Magenta.” The company’s product range includes memory foam, latex-based, bonded mattresses, and various types of pillows. Listed peers include Sheela Foam Ltd and Tirupati Foam Ltd, with P/E ratios of 44.65 and 17.85, respectively.
In terms of financial performance, Magenta Lifecare’s revenue increased by 1.79%, while profit after tax (PAT) rose by 29.96% during the fiscal years ending March 31, 2023, and March 31, 2022.
Use of IPO Proceeds
The IPO, valued at approximately ₹7 crore, involves the issuance of 2,000,000 equity shares at a face value of ₹10 each. The net proceeds will be used to finance the company’s working capital requirements and for general corporate purposes.
Market Reaction and Grey Market Premium
The grey market premium (GMP) for Magenta Lifecare shares stands at +28, indicating a strong market demand. This premium suggests that the shares are trading at ₹63 in the grey market, which is 80% higher than the IPO price of ₹35.
Conclusion
The Magenta Lifecare IPO has captured significant investor interest, as evidenced by its substantial oversubscription and high grey market premium. With strong financial performance and clear use of proceeds, the company is well-positioned to attract both retail and institutional investors.
Disclaimer:
CurrencyVeda provides this news article for informational purposes only. We do not offer investment advice or recommendations. Before making any investment decisions, please conduct thorough research, consult with financial experts, and carefully consider your financial situation, risk tolerance, and investment goals. Investing in the stock market carries risks, and it’s essential to make informed choices based on your individual circumstances. CurrencyVeda is not liable for any actions taken based on the information provided in this article.
