Global Surfaces IPO opens tomorrow: GMP and other details. Apply or not?

The Grey Market Premium (GMP) of Global Surfaces Limited is observed at ₹45, according to market sources. Considering the issue band price of ₹133-140, the expected listing price could be ₹185 (upper band price + GMP).

Market observers said that Global Surfaces Ltd IPO GMP is ₹45, which means grey market is expecting that Global Surfaces Ltd IPO listing would be around ₹185 ( ₹140 + ₹45), which is around 32 per cent higher from its price band of ₹133-140 per equity share.

However, stock market experts maintained that GMP is not an ideal indicator about the success of failure of an IPO. They advised investors to scan balance sheet of the firm and find out the sustainability of business and revenue model of the company. They also said that GMP is a non-regulated number, which is completely speculative.

Global Surfaces Ltd reported a total revenue of ₹198 crore for the fiscal year ended 31 March, 2022, reporting an after-tax net profit of ₹35 crore. For the six months period that ended 30 September, 2022, the company has reported revenue of ₹99 crore and profit after tax of ₹13.6 crore.

“If we annualize FY23 earnings and consider post-IPO fully diluted paid-up equity capital, the asking price is at a P/E of around 21.84 considering the expected listing price of ₹175 and EPS of ₹8.01. If we consider FY22 earnings, the P/E stands at 16.64 considering the expected listing price of ₹175 and EPS of ₹10.52,” said Manish Khanna, Co-Founder at Unlisted Assets.

The IPO comprises fresh issuance of 85.20 lakh equity shares and an Offer For Sale of up to 25.5 lakh equity shares by promoters – Mayank Shah and Sweta Shah.

Funds raised through fresh issuance will be used for setting up the company’s proposed facility — Global Surfaces FZE — in Dubai.

“Global Surfaces believe that it has a strong opportunity in the international market, so it is setting up a manufacturing unit in Dubai. Besides, they intend to add new products and designs as well as adopt technology and automation which would aid growth and increase operational efficiency,” brokerage Religare Broking said.

On key risk, the brokerage noted two points:

1) Highly dependent on few customers and geography (USA) for revenue.

2) The company does not have any long term arrangements/agreements with customers or suppliers and this can impact business operations.

Half of the issue size has been reserved for qualified institutional buyers, up to 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors.

Unistone Capital is the sole book running lead manager to the issue. The equity shares of the company will be listed on leading bourses NSE and BSE.

Global Surfaces Ltd is engaged in the business of processing natural stones and manufacturing engineered quartz. The company is a wholly-owned subsidiary of Global Surfaces FZE, which is a Dubai-based entity and is in the business of manufacturing engineered quartz. The company has two manufacturing units in Rajasthan.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.