Paramount Dye Tec makes tepid market debut, shares list at 6% discount on NSE SME platform; check details

Shares of small and medium enterprise (SME) Paramount Dye Tec Ltd made a disappointing trading debut on Tuesday, October 8, with the stock listing at a 6% discount on the NSE SME platform, Emerge.

The Paramount Dye Tec stock opened the session at ₹109.90, down 6.1% compared with its initial public offering (IPO) price of ₹117. Within minutes, the stock corrected another 5% to hit the lower circuit of ₹104.4 apiece.

Since the minimum bid quantity to apply for the Paramount Dye Tec IPO was 1,200 shares, bidders who were allotted shares in the primary issue would have been sitting on listing losses of ₹8,520 (₹7.1 x 1,200) per lot as soon as the stock started trading on exchanges.

Surprisingly, the ₹28.43-crore Paramount Dye Tec IPO saw decent demand when it was open for bidding from September 30 to October 3. The issue was subscribed over 50 times during the three-day bidding period, with the company receiving bids for 8.09 crore shares compared with 16.16 lakh shares on offer.

Paramount Dye Tec IPO subscription and other details

Non-institutional investors (NII) had led the demand, with the portion reserved for them overbooked by more than 135 times. The retail category was subscribed over 36 times, while the qualified institutional buyers’ (QIB) portion was overbid by more than 10 times.

The Paramount Dye Tec IPO was a 100% book-built issue that consisted entirely of fresh issuance of 24.3 lakh shares, with no offer-for-sale (OFS) component.

The price band for the offer was fixed at ₹111 to ₹117 per share, with the lot size for an application being 1,200 shares.

Ahead of the IPO launch, Paramount Dye Tec also raised ₹8.09 crore through the anchor investor round. The company's Board Of Directors, at its meeting held on September 27, finalised the allocation of 6.91 lakh equity shares to four anchor investors at an offer price of ₹117 per share. The list of investors included names like NAV Capital VCC, MoneyWise Financial Services Pvt. Ltd, Next Orbit Growth Fund—III, and TGISME Fund.

Paramount Dye Tec had earlier announced that it intended to utilise the net fresh issue proceeds for setting up a manufacturing unit, repaying/prepaying certain debt facilities availed by the company, paying expenses towards registration of land purchased from the promoter, and for general corporate purposes.

About Paramount Dye Tec Limited

Paramount Dye Tec, founded in January 2014, is a leading manufacturer of recycled synthetic yarn. The Ludhiana-based company produces yarns by recycling waste synthetic fibre, catering to the business-to-business (B2B) segment of the textile industry.

The company offers a range of products, including synthetic fibre and yarns such as acrylic, polyester, nylon, wool, hand-knitting and acrylic blend yarns. It has two manufacturing facilities at two locations in Punjab.

The company’s revenue stood at ₹29.5 crore in the first 10 months of financial year 2023-24 (till January 31, 2024) compared to ₹23.7 crore in full financial year 2022-23. Profit after tax (PAT) during the first 10 months of FY24 stood at ₹2.8 crore compared with ₹3.5 crore in FY23.