Madhusudan Masala's IPO oversubscribed, shares debut at 71.4% premium

Gujarat-based spice manufacturer, Madhusudan Masala, witnessed a significant response from investors in its initial public offering (IPO), which was oversubscribed by 412.94 times on the final day of bidding last Wednesday. The company received bids for 100.51 crore shares, vastly exceeding the issue size of 24.34 lakh shares.

Madhusudan Masala, known for producing over 32 types of spices under the brand names Double Hathi and Maharaja, launched its IPO on Monday, September 19. The public offer only consisted of a fresh issue portion, with a price band fixed between Rs 66 to Rs 70 per share, aiming to raise Rs 23.80 crore at the upper price band.

The company's shares made their debut on the NSE SME platform at a premium of 71.4% on Tuesday, with each share priced at Rs 120 as against the IPO price of Rs 70 per share. However, shortly after listing, the stock hit a lower circuit and experienced a drop of 5% to Rs 114.

Earlier today, the company's grey market premium (GMP) also saw an increase, reaching Rs 61 above the IPO's upper end price, suggesting a potential listing price of Rs 131.

Retail investors and high net-worth individuals (non-institutional investors) played a significant role in driving the issue subscription. They subscribed to the issue 592.8 times and 576.6 times their allotted quota respectively. Qualified institutional buyers also demonstrated interest and purchased shares at a rate of 86.64 times their designated allocation.

The proceeds from the IPO will primarily be used by Madhusudan Masala to fulfill working capital needs and other corporate objectives. In addition to its extensive range of spices, the company also offers products like whole spices, tea, and other grocery items.

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