Forcas Studio IPO: Shares list at a 90% premium over IPO price on NSE SME; check key details

Shares of menswear manufacturer Forcas Studio Limited made a stellar debut on Monday, August 26. The stock price almost doubled on the first day of trade on the NSE SME platform.

The Forcas Studio stock opened the session at ₹152 apiece on the NSE Emerge platform, up 90% compared with its initial public offering (IPO) of ₹80. Within minutes of the opening of trade, the share price rallied further to hit the 5% upper circuit at ₹159.6 levels.

As the minimum bidding quantity in the Forcas Studio IPO was 1,600 shares, successful bidders who were allotted shares in the primary issue would have been sitting on a profit of at least ₹1.15 lakh (₹72 x 1,600) as soon as trading began in the stock.

A strong listing was being expected for Forcas Studio shares as its ₹37.44-crore IPO was booked more than 417 times during the three-day bidding that started on August 19 and ended on August 21.

The company's shares were in huge demand, with applications for almost 130 crore shares received against a net issue size of 31.13 lakh shares.

The non-institutional investors (NII) quota was the most overbooked, at a whopping 702 times. Retail investors’ quota was oversubscribed nearly 416 times, while the qualified institutional buyers’ segment was booked 205 times.

Ahead of the IPO's launch, Forcas Studio also raised ₹10.65 crore via an anchor investor round. The company's board of directors, in a meeting held on August 16, finalised the allocation of 13.31 lakh equity shares to seven anchor investors at an average price of ₹80 per share.

Forcas Studio had earlier said that it proposed to use the net proceeds from the issue to fund the upgradation of the warehouse, the prepayment or repayment of certain secured loans availed by the company, the funding of the company's working capital requirements, and general corporate purposes.

The Forcas Studio IPO was a 100% book-built issue. The offer was entirely a fresh issuance of 46.8 lakh shares. The price band of the IPO was set at ₹77 to ₹80 per share, with a lot size for an application of 1,600 shares.

Incorporated in April 2010, Forcas Studio sells men’s clothing, including shirts, jeans, t-shirts, trousers, cotton pants, sportswear, party wear and fashion wear. The company provides these products online and offline to customers all over India under the brand names ‘FTX’, ‘Tribe’ and ‘Conteno.

It sells its products online and through various large-format stores, such as V-Mart Retail, V2 Retail, and Metro Bazar.

It also offers white-labelling services for other brands, such as Landmark Group, V-Mart Retail, V2 Retail, Highlander, Cobb, Kontail and more. The company has four warehouses in Kolkata for supply chain management.