Investing in Initial Public Offerings (IPOs) can be akin to a money multiplier, especially with good companies. Analyzing a company’s history, geography, and earnings potential before deciding to invest can lead to substantial gains. Recently, Tata Tech shares grew over 160% on the first day, for example, the potential of IPO investments. On the flip side, companies like Graphisads Limited left investors with a negative return. Currently, SJ Logistics is open for IPO subscription, and it’s crucial to understand the company’s operations before considering an investment.
SJ Logistics IPO Overview
SJ Logistics’ IPO, open until December 14, 2023, belongs to the Small and Medium Enterprises (SME) category. The lot size is 1,000 shares, and the price band is set at Rs. 121-125. Investors aiming for shares in the upper band need to invest a minimum of Rs. 1,25,000.
Read More – Unlocking Investment Opportunities: S J Logistics IPO
Bidding Activity and Grey Market Premium (GMP)
On the first day, SJ Logistics received nearly 25 times the bids or offers. The Grey Market Premium, which was Rs. 40 on December 4, has surged to Rs. 125. A rising GMP is an indicator of positive investor behavior. However, it’s important to note that Grey Market Premium (GMP) can change significantly before listing.
Potential Listing Price
If the shares are allotted at the upper band of Rs. 125, and the Grey Market Premium (GMP) remains at Rs. 125, the potential listing price could be Rs. 250. This suggests a strong likelihood of oversubscription, and investors may want to participate in the IPO.
Considerations Before Investment
- Financial Performance: In the financial years 2021-23, SJ Logistics maintained stable business operations. With a net revenue of Rs. 134.31 crore in the fiscal year 2022-23, the company has shown improved performance compared to the previous years.
- Promoter Holding: As of now, promoters hold a 67.55% stake in the company. Rajan Hasmukh Lal Shah is a notable name among the promoters.
- Timeline:
- December 12, 2023 – IPO opens
- December 14, 2023 – IPO closes
- December 15, 2023 – Likely allotment
- December 18, 2023 – Refund initiation (for non-allotted shares)
- December 18, 2023 – Credit of shares to demat account
- December 19, 2023 – Possible listing
Conclusion
Investing in Initial Public Offerings involves careful consideration of various factors. While a robust Grey Market Premium (GMP) is a positive sign, investors should conduct thorough research on the company’s business model, market presence, and future growth prospects. It’s advisable to consult with a certified financial advisor before making any investment decisions. Keep an eye on SJ Logistics to see if it follows the trend of successful IPOs or experiences any changes before listing.