VMS TMT IPO fully subscribed within hours: Should you bid?
What's the story
VMS TMT's ₹149 crore initial public offering (IPO) has been fully subscribed within hours of its launch today. The issue saw a robust response, with overall subscriptions hitting 1.8 times at the time of writing. The Ahmedabad-based company's IPO comes at a time when investor demand for primary issues has been strong, with more than 40 recent listings.
Investor response
Strong demand from institutional investors
The investor response to VMS TMT's IPO has been particularly strong among Qualified Institutional Buyers (QIBs), who have already subscribed 6.83 times their allotted shares. The company's shares are being offered in a price band of ₹94-99 per share and the issue will close on Friday. The current gray market premium (GMP) for VMS TMT is at 23%, indicating investor expectations of a strong listing gain, assuming market conditions remain favorable.
Breakdown
Retail, HNI segments also see healthy interest
As of 10:30am on day 1 of bidding, the retail segment has subscribed 84% of their 75 lakh share allocation. High-net-worth individuals and other non-institutional investors have shown stronger demand, subscribing to 1.38 times the allotted 30 lakh shares. Institutional investors have also shown strong interest in this issue with bids received so far amounting to a whopping 6.83 times the reserved shares for this category (18 lakh).
Investment plan
Fresh issue of 1.5 crore shares
The company is issuing a fresh offer of 1.5 crore equity shares, raising up to ₹148.5 crore at the upper price band. Investors can apply for a minimum of 150 shares and in multiples thereafter, which amounts to a retail investment of ₹14,850 at the highest price. The issue is allocated approximately 50% to QIBs, 35% to retail investors, and the remaining portion to NIIs.
Company overview
Company overview and recent financial performance
VMS TMT manufactures Thermo Mechanically Treated (TMT) bars, which are widely used in construction and infrastructure projects. The company's Bhayla village plant near Ahmedabad has an annual capacity of 200,000 metric tons. Despite a revenue drop from ₹873 crore in FY24 to ₹771 crore in FY25, profitability has strengthened with profit after tax rising from ₹4.2 crore in FY23 to ₹14.7 crore in FY25.
Fund allocation
IPO proceeds to be utilized for debt repayment
The funds raised from the IPO will mainly be used to prepay or repay borrowings of ₹115 crore, with the remaining amount allocated for general corporate purposes. Analysts have recommended subscribing to this IPO with a long-term view as it appears aggressively priced.