Nikunj Stock Brokers Limited underwrites 84.97% of offer

Nikunj Stock Brokers Limited has indicated that it will underwrite up to 12,34,400 equity shares, or 84.97% of the 14,52,800-share offer, and is the only named market maker. Nikunj Stock Brokers must provide two-way quotes for 75% of each trading day for three years from listing, subject to Securities and Exchange Board of India regulations.

Why does Nikunj Stock Brokers underwrite 84.97% of the offer?

Nikunj Stock Brokers has the larger of the two disclosed underwriting commitments, at up to 12,34,400 shares or 84.97% of the offer. Gretex Corporate Services Limited, the book running lead manager, has committed to underwrite up to 2,18,400 shares, or 15.03%, bringing the stated total to 14,52,800 shares and 100% of the offer.

The prospectus describes the offer as 100% underwritten under an underwriting agreement dated August 12, 2026, although it also states that the agreement had not been executed as of the date of the red herring prospectus. The stated share commitments are subject to finalisation of the basis of allotment, so they identify the indicated maximum underwriting allocation rather than a final allotment of shares.

Underwriting is the contractual arrangement under which an underwriter may have to procure or subscribe for shares to the extent of investor payment defaults. The obligations are several, meaning each underwriter has a separate obligation subject to the agreement's conditions. Allocation among underwriters need not be proportional to the stated commitments; if an underwriter does not fulfil its obligations, the prospectus says Gretex Corporate Services must fulfil them under the underwriting agreement.

How will Nikunj Stock Brokers support trading after listing?

Nikunj Stock Brokers is the only market maker named in the disclosed market-making arrangement dated August 12, 2026. It has agreed to receive or deliver equity shares in the market-making process for three years from the listing date, or for another period if amendments to the Securities and Exchange Board of India, or SEBI, Issue of Capital and Disclosure Requirements Regulations change that period.

A market maker is an intermediary that posts executable purchase and sale quotations to support trading in a security. Nikunj Stock Brokers is registered in the small and medium enterprises segment of BSE Limited, known as BSE SME, under market-maker member code SMEMM0664523112017. The prospectus also records SEBI registration number INZ000169335 and identifies Pramod Kumar Sultania as the contact person.

The central operating requirement is that Nikunj Stock Brokers provide a two-way quote, meaning both buy and sell prices, for at least 75% of each trading day. BSE SME will monitor that requirement, and Nikunj Stock Brokers must guarantee execution at its quoted price and quantity. The intermediary must also notify the exchange in advance of every blackout period in which quotes will not be offered.

What trading limits apply to Nikunj Stock Brokers' market making?

Nikunj Stock Brokers must meet minimum lot and quote-depth requirements when it makes a market on BSE SME. The current minimum trading lot is 400 equity shares, and the market maker cannot sell below that contract size, although BSE SME may revise the lot size. The disclosed minimum quote depth is Rs 1 lakh.

An investor holding shares valued below Rs 1 lakh may still offer them to Nikunj Stock Brokers, but only by selling the entire holding in one lot and giving the required declaration to the selling broker. This exception applies to smaller holdings, while the standard quote-depth rule defines the minimum value normally available at the market maker's quoted price.

The quoted prices must comply with BSE SME and SEBI spread requirements. For market prices up to Rs 50, the disclosed maximum spread is 9% of the sale price; it is 8% from Rs 50 to Rs 75, 6% from Rs 75 to Rs 100, and 5% above Rs 100. For offers up to Rs 250 crore, the normal-session price band on the first trading day is 5% of the equilibrium price from the call auction, or 5% of the offer price if no equilibrium price is discovered.

When can Nikunj Stock Brokers stop providing buy quotes?

Nikunj Stock Brokers can be exempt from providing buy quotes after three months of market making if its holding reaches 25% of the company's shares, including mandatory initial inventory equal to 5% of the offer size. It must resume two-way quotations when its holding falls to 24%. The prospectus specifies no equivalent exemption on the downside if inventory declines.

The 25% exemption and 24% re-entry levels are the disclosed thresholds for offers up to Rs 20 crore. The capital structure reserves up to 72,800 shares for the market-maker portion, equal to 5% of the 14,52,800 shares in the offer. The remaining net offer to the public is up to 13,80,000 shares, subject to finalisation of the basis of allotment.

If Nikunj Stock Brokers exhausts its inventory through market making, BSE SME may notify SEBI after verification. Conversely, the 25% threshold excludes any shares allotted to the market maker under the offer above 25% when calculating the exemption. These provisions make inventory levels relevant to whether the firm is required to post buy quotes after the initial three-month period.

What happens if the market-making arrangement ends early?

Nikunj Stock Brokers may terminate the arrangement by giving three months' notice or on mutually acceptable terms to the merchant banker. If termination occurs before the compulsory three-year market-making period ends, Gretex Corporate Services must arrange a replacement market maker during the notice period before the existing market maker is released.

The company and Gretex Corporate Services may appoint replacement or additional market makers, but the total may not exceed five for the security at any time. The arrangement therefore identifies one named firm at present, while allowing additional firms or a successor if the original arrangement changes before the compulsory period ends.

BSE SME monitors obligations in real time and may impose monetary penalties, suspend market-making activity or suspend trading membership for exceptions or non-compliance. A failure to provide two-way quotes for at least 75% of a trading day can trigger exchange action. Temporary or full withdrawal may be allowed for special circumstances, but controllable reasons require prior exchange approval; the exchange decides whether a reason is controllable.

Conclusion

Nikunj Stock Brokers combines a stated underwriting commitment for 84.97% of the 14,52,800-share offer with the only named three-year market-making role. The functions are distinct: underwriting addresses payment-default risk in the offer, while market making requires executable buy and sell quotations after listing under BSE SME and SEBI conditions.

The next disclosed matters to watch are finalisation of the basis of allotment, which affects the stated underwriting share counts, and whether Nikunj Stock Brokers remains in the role for the compulsory period. Any early termination would require Gretex Corporate Services to arrange a replacement, while future SEBI or exchange changes may alter the market-making conditions.