The shares of Rappid Valves (India) Limited, a small and medium-sized business (SME), made an impressive trading debut. The stock was listed on the NSE Emerge platform at a premium of almost 41 per cent, on Monday, September 30.

Compared to its Rs 222 initial public offering (IPO) price, the Rappid Valves stock opened the session at Rs 312, up 40.5 per cent. Shortly after the session began, the share price increased by 5 per cent, reaching an intraday high of Rs 327.6 per share.

At 02.03 am, the stock, lost morning momentum, gave up some gains, and was trading at 2.60 per cent lower at Rs 303.90, respectively.

Listing gains for investors

Allotted shares in the primary issue, successful bidders would have been sitting on listing gains of Rs 54,000 (Rs 90 x 600) as soon as trading in the stock started, since the minimum bid quantity to apply for the Rappid Valves IPO was 600 shares.

IPO subscription across categories

Investors responded favourably to the Rs 30.4-crore Rappid Valves India IPO, which was available for subscription from September 23 to September 25.

During the three-day bidding period, the issue was oversubscribed by over 176 times, with bids for 16.03 crore shares being received by the company against the 9.1 lakh shares that were offered for sale.

The demand was dominated by non-institutional investors (NII), as the share set aside for them was 491.5 times oversubscribed. The qualified institutional buyers' portion was nearly 56 times booked, while the retail investors' category was overbid by over 109 times.

IPO structure and price band

The entire 13.7 lakh shares that were issued fresh comprised the 100 per cent book-built offering of the Rappid Valves IPO. The 600 shares in a lot were the price range for the IPO, which was set at Rs 210 to Rs 222 per share.

Anchor Investment

Rappid Valves completed its anchor investor round and raised Rs 8.64 crore prior to the IPO's launch. The board decided to allocate 3.89 lakh shares at Rs 222 per share to four anchor investors during its meeting on September 20.

The company stated that its proposed use of the net proceeds from the offering would be to finance the purchase of new equipment, software, and plant; renovation of the registered office and the current manufacturing unit; and repayment or prepayment of all or a portion of its debt.

Company financials

In the fiscal year 2023–24, the company's revenue climbed by 123 per cent to Rs 36.6 crore, up from Rs 16.4 crore in the preceding fiscal year 2022–23. Compared to FY23's Rs 45.56 lakh, profit after tax (PAT) more than doubled to Rs 4.1 crore in FY24.