Indian Phosphate IPO Soars on Day 1: Subscribed 8 Times, Retail Investors Rush In—Check GMP Now

The Indian Phosphate IPO, which started on Monday, August 26, and will close on Thursday, August 29, has seen strong demand on its first day. The IPO shares are priced between ₹94 and ₹99 each, with a face value of ₹10. Investors can bid for shares in lots of at least 1,200.

Company Overview

Indian Phosphate specializes in producing Linear Alkylbenzene Sulphonic Acid (LABSA) at 90% purity, which is commonly used as an anionic surfactant in various detergents like powders, cakes, toilet cleaners, and liquid detergents. The company also manufactures “Single Super Phosphate” (SSP) and “Granules Single Super Phosphate” (GSSP) fertilizers, which meet the Fertilizer Control Order of India’s standards and are available in powdered, granulated, and fortified forms with zinc and boron.

Strategic Location and Market Presence

The company’s manufacturing facility is located in Udaipur, Rajasthan, close to key raw material sources. Indian Phosphate has a strong presence in several states, including Punjab, Bihar, Gujarat, Haryana, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh, Himachal Pradesh, West Bengal, and Uttarakhand.

Financial Performance and Market Comparisons

According to its red herring prospectus, Indian Phosphate’s listed peer is Rama Phosphates Ltd. However, between March 31, 2024, and March 31, 2023, the company’s profit after tax (PAT) dropped by 27%, and its revenue decreased by 7%.

Subscription Status on the First Day

On its first day, the Indian Phosphate IPO has been subscribed 8.78 times, with the retail portion seeing significant interest, being subscribed 15.14 times. The NII portion was booked 5.14 times, and Qualified Institutional Buyers accounted for 39% of the bids. The company has received bids for 3,95,41,200 shares against the 45,02,400 shares on offer, as of 15:38 IST, according to data from chittorgarh.com.

IPO Details and Fund Utilization

The IPO, worth ₹67.36 crore, includes a fresh issue of 6,804,000 equity shares with a face value of ₹10 each. There is no “offer for sale” component. The proceeds from the IPO will be used to meet working capital needs, establish a new manufacturing plant in Tamil Nadu for producing sulfuric acid, LABSA 90%, and magnesium sulfate, and for general corporate purposes.

Grey Market Premium

In the grey market, the Indian Phosphate IPO is trading at a premium of ₹100. This suggests that investors are willing to pay ₹199 per share, which is 101.01% higher than the IPO price of ₹99. The ‘grey market premium’ reflects investors’ readiness to pay more than the issue price.