Pramara Promotions IPO Final Subscription Status

The IPO of Pramara Promotions Ltd closed on Monday, 05th September 2023. The IPO had opened for subscription on 01st September 2023. Let us look at the final subscription status of Pramara Promotions Ltd at the close of subscription on 05th September 2023. It was a fixed price IPO with the price being fixed at ₹63 per share while the stock had a face value of ₹10 per share.

About the Pramara Promotions IPO

Pramara Promotions IPO worth ₹15.27 crore comprises entirely of a fresh issue with no offer for sale (OFS) component. The Fresh Issue portion of Pramara Promotions Ltd entails the issue of 24.24 lakh shares at which at the fixed IPO price of ₹63 per share aggregates to ₹15.27 crore. The stock has a face value of ₹10 and retail bidders can bid in minimum lot size of 2,000 shares each. Thus, the minimum investment of ₹126,000 in the IPO is the base limit. That is also the maximum that a retail investor can apply for in the IPO.

HNIs / NIIs can invest in a minimum of 2 lots of 4,000 shares worth ₹252,000 as the bare minimum investment. There is no upper limit for the HNI / NII category or even for the QIB category. Pramara Promotions Ltd will deploy the funds for working capital needs and for extending loans to subsidiaries as well as general corporate purposes. Post the IPO, the promoter equity in the company will get diluted from 95.41% to 69.81%. The issue is lead managed by Fedex Securities Private Ltd, while Bigshare Services Private Ltd will be the registrars to the issue. Let us now turn to the final subscription details of the IPO as of the close of subscription on 05th September 2023.

Final subscription status of Pramara Promotions IPO

Here is the subscription status of the Pramara Promotions Ltd IPO as at close on 05th September 2023.

The issue was open for retail investors, QIBs and for the HNI / NIIs. There was a broad quota designed for each of the segments viz. the QIBs, the retail and the HNI NII. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO. A total of 1,24,000 shares were allocated as market maker portion to Pure Broking Ltd, which will act as a market maker to provide bid-ask liquidity on the counter post listing. Market maker action not only improves liquidity in the counter but also reduces the basis risk.

As can be seen, from the above table, the company has not made any allocation to the anchor investors. In fact, it did not have a separate dedicated QIB quota and there was just a retail quota and the non-retail quota. The number of shares were equally allocated between retail investors and non-retail investors out of the net offer to the public (net of the market maker portion allocation.

How subscription built up for the Pramara Promotions IPO

The oversubscription of the IPO was dominated by the HNI / NIIs followed by the retail investors and the QIB investors in that order. The table below captures the day-wise progression of the subscription status of Pramara Promotions IPO.

It is clear from the above table that both the retail portion and the HNI / NII portion failed to get fully subscribed on the first day of the IPO. However, the HNI / NII portion saw good traction on the last day, which is normally when the corporate and funded applications start to trickle in. While the retail got subscribed full on the second day, the HNI / NII portion got fully subscribed only on the third day. However, the overall IPO was fully subscribed on the second day itself although most of the traction was seen on the last day. Both the categories of investors viz., HNIs / NIIs and retail categories saw good traction and build up of interest on the last day of the IPO. There is an allocation of 124,000 shares to Pure Broking Ltd for market making. The market maker offers two way quotes on the stock post listing using the inventory of shares and ensures that investors do not get overly worried about liquidity and basis risk in the early stages.

The IPO of Pramara Promotions Ltd opened for subscription on 01st September 2023 and closed for subscription on 04th September 2023 (both days inclusive). The basis of allotment will be finalized on 08th September 2023 and the refunds will be initiated on 11th September 2023. In addition, the demat credits are expected to happen on 12th September 2023 and the stock is scheduled to list on 13th September 2023 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated.

A quick word on Pramara Promotions Ltd and the SME IPO

Pramara Promotions Ltd is a promotional marketing agency, incorporated in 2006. It is engaged in the business of ideation, conceptualization, designing manufacturing and marketing of promotional products and gift items. It caters to clients across a cross section of industry groups including, FMCG (fast moving consumer goods), QSR (quick service restaurants), pharma, beverage companies, cosmetics, telecom, and media. Pramara Promotions Ltd offers niche services to these companies including cross promotions, loyalty and reward tabulation, corporate gifting, sweepstakes promotions etc. The company also arranges to manufacture the products under an OEM arrangement, wherein the company makes products like water bottles, pens, and other gift items under an outsourcing agreement with another manufacturer. These are white labelled manufacture where the products are appropriately branded with the company's logo or design.

Pramara Promotions Ltd has, till date, designed and manufactured over 5,000 products. The company has also expanded its product offerings and has recently launched proprietary brands like "Toyworks" and "Tribeyoung". As of July 2023, the Pramara Promotions Ltd has overall staff of 83 employees. Some of its strengths in the business include its existing track record, its strong franchise with corporate customers, ability to manufacture and deliver solutions in a cost effective manner and fairly stringent quality control and production standards. It will be using the IPO funds to predominantly fund its working capital gaps and for general corporate purposes. It is also into digital gifting ideas, which are growing in importance and appeal in the current market.

The company has been promoted by Rohit Lamba and Sheetal Lamba. The promoter holding in the company currently stands at 95.41%, which dilute post IPO to 69.81%. The funds will be used for meeting its working capital funding gaps and for general corporate expenses. Part of the monies raised will also go towards meeting the expenses of the issue. While Fedex Securities Private Ltd will be the lead manager to the issue, Bigshare Services Private Ltd will be the registrar to the issue. The market maker for the issue is Pure Broking Ltd.