Shyam Dhani IPO Subscribed 918x, GMP Hits 100%

Unprecedented Investor Demand for Shyam Dhani IPO

The initial public offering (IPO) of spices manufacturer Shyam Dhani Industries has concluded with an exceptional response from investors. The SME IPO was oversubscribed by a staggering 918.12 times by the final day of bidding on December 24, making it one of the most sought-after public issues of the year. The overwhelming demand highlights strong investor confidence in the company's fundamentals and future growth prospects.

Deep Dive into Subscription Numbers

The three-day bidding window, from December 22 to December 24, saw investors bid for 361.55 crore equity shares against an available offer size of just 39.38 lakh shares. This translated into a total demand worth approximately ₹25,308.9 crore, a figure that significantly overshadows the company's post-issue valuation. The robust interest was consistent across all investor categories. The portion reserved for non-institutional investors (NIIs) was subscribed 1,613 times, while the retail investor category saw a subscription of 1,138 times. Qualified institutional buyers (QIBs) also showed strong interest, with their quota being subscribed 256.2 times.

Grey Market Premium Signals Strong Listing

Reflecting the massive subscription figures, the Grey Market Premium (GMP) for Shyam Dhani Industries' shares surged. Market observers noted that the GMP was trading at ₹70 per share, representing a 100% premium over the upper price band of ₹70. The grey market, an unofficial platform for trading IPO shares before their stock market debut, often serves as an indicator of listing day performance. The consistent rise in GMP, from 60% to 100% during the bidding period, suggests the market anticipates a strong listing.

IPO Details and Timeline

The Rajasthan-based company aimed to raise ₹38.48 crore through its maiden public issue of 54.98 lakh equity shares. The price band for the issue was fixed at ₹65 to ₹70 per share. Following the closure of the issue, the finalization of share allotment is scheduled for December 26, with the shares expected to be listed on the NSE SME platform on December 30.

Company Profile and Financial Strength

Founded in 1995, Shyam Dhani Industries Limited is an ISO-certified company involved in manufacturing, exporting, and supplying a wide range of spices. The company processes 163 varieties of spices under its brand "SHYAM" and also trades in other grocery products. Its manufacturing facility is located in Jaipur, Rajasthan. The company has demonstrated consistent financial growth. For the financial year ending March 31, 2025, it reported a revenue of ₹124.75 crore and a profit after tax (PAT) of ₹8.04 crore. Key performance indicators such as Return on Equity (ROE) at 41.06% and Return on Capital Employed (ROCE) at 39% highlight its operational efficiency.

Utilization of IPO Proceeds

The company plans to utilize the net proceeds from the public offering for several strategic purposes. A significant portion will be allocated to meet working capital requirements and for brand creation and marketing expenses. Funds will also be used to purchase new machinery for its existing manufacturing unit and to install a solar rooftop plant. Additionally, a part of the proceeds will be used to reduce certain debts, with the remainder allocated for general corporate purposes.

Broader Market for Public Issues

The strong performance of the Shyam Dhani IPO occurred alongside several other public issues. The IPO of Sundrex Oil Company was subscribed 1.51 times, while EPW India's issue saw a 1.29 times subscription. Dachepalli Publishers' IPO was subscribed 1.9 times, indicating a generally positive but more moderate investor appetite for other issues in the market during the same period. The exceptional demand for Shyam Dhani Industries sets it apart, suggesting that investors were particularly drawn to its strong brand, financial track record, and reasonable valuation in a competitive sector.

Outlook for Listing Day

Given the phenomenal subscription levels and a 100% grey market premium, expectations are high for a robust market debut for Shyam Dhani Industries on December 30. The overwhelming investor response points to a significant potential for listing gains. However, investors should note that GMP is not an official indicator and market conditions on the listing day will ultimately determine the stock's performance.