Pentagon Rubber SME IPO lists with a premium but fails to hold gains
Pentagon Rubber Ltd shares listed on the NSE SME exchange at a premium on Friday. The stock was listed at ₹130 per share, 85.7 percent higher than the issue price of ₹70 on the NSE SME exchange. However, the stock failed to sustain the gains and hit 5% lower circuit post listing.
The company set the price band in the range of ₹65 and ₹70 per share. The subscription period for the IPO began on Monday, June 26 and ended on Friday, June 30.
On day 3, the ₹66 crore Pentagon Rubber IPO had a 25.69 times subscription. The public issue was subscribed 41.15 times in the retail category, 8.65 times in the QIB category, and 12.21 times in the NII category on day 3.
Pentagon Rubber IPO day 3: Issue booked over 25 times; Check subscription, GMP, other details
Pentagon Rubber is a manufacturer of rubber conveyor belts, transmission belts, rubber sheets and elevator belts having a headquarters in Mohali.
The proceeds from the initial public offering will be used to cover issuance costs, general company purposes, and working capital needs. Its company activities will be able to grow with the support of the extra working cash.
The funds obtained through the IPO, according to the red herring prospectus, will aid the company in growing its turnover by 55 to 60 percent.
Pentagon Rubber has already begun to increase its production capacity with the help of internal accruals and borrowings. By December 2023, the capacity will be up to 2.5 times greater, or 6,00,000 metres, than it is now, which is 2,40,000 metres.
Pentagon Rubber’s total revenue for the fiscal year that ended March 31, 2023, was ₹35.12 crore. The company reported a net profit of ₹3.09 crore and an EBITDA of ₹4.29 crore.
Anil Jain, Lalit Jain, Ashish Jain, and Saurabh Jain founded Pentagon Rubber in 2004, and company currently has a production facility in Dera Bassi, Punjab.
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Updated: 07 Jul 2023, 10:18 AM IST
