Paramount Speciality Forgings hits 5% upper circuit after listing at 41% premium on NSE SME; check details

Shares of Paramount Speciality Forgings Ltd listed at a nearly 41% premium on the NSE Emerge platform on Wednesday, September 25, marking another strong trading debut by a small and medium enterprise (SME) on exchanges.

The Paramount Speciality Forgings stock opened the session at ₹83, up 40.7% compared to its initial public offering (IPO) price of ₹59. Within minutes after listing, the stock rallied further by 5% to hit the upper circuit limit at ₹87.15 apiece on the NSE.

With the minimum bid quantity to apply for the Paramount Speciality Forgings IPO being 2,000 shares, successful bidders who were allotted shares in the primary issue managed to make listing gains of at least ₹48,000 (₹24 x 2,000).

The ₹32.34-crore Paramount Speciality Forgings IPO was open for subscription from September 17 to September 20. During the four-day bidding period, it was oversubscribed nearly 74 times, with the company receiving bids for 26.94 crore shares compared with 36.46 lakh shares on offer.

Non-institutional investors (NIIs) led the demand, with the portion reserved for them being oversubscribed by over 220 times. The retail category was booked more than 41 times, while the qualified institutional buyers (QIBs) portion was subscribed nearly 21 times.

The Paramount Speciality Forgings IPO was a 100% book-built issue. It was a combination of a fresh issuance of 48.02 lakh shares, aggregating to ₹28.33 crore, and an offer-for-sale (OFS) of 6.8 lakh shares, aggregating to ₹4.01 crore.

The price band for the Paramount Speciality Forgings IPO was fixed at ₹57 to ₹59 per share, while the lot size was 2,000 shares.

The company had mentioned that it proposed to utilize the net proceeds from the fresh issuance to fund capital expenditures through the purchase of machinery and equipment required for the expansion at the Khopoli plant and for general corporate purposes.

Established in 1996, Paramount Speciality Forgings is among India’s leading manufacturers of steel forgings. The company offers a wide range of products catering to the extensive needs of the petrochemical, oil and gas, nuclear, power and other heavy engineering sectors. Its products are also exported to Canada, Europe, and the Middle East.

The company has two manufacturing facilities in Maharashtra – one in Kamothe and the second one in Khalapur.

The company recorded a tepid 1% increase in revenue to ₹113.6 crore in the financial year 2023-24, compared with ₹112.2 crore in 2022-23. Profit after tax (PAT), however, increased by a huge 163% to ₹7.25 crore in FY24 from ₹2.76 crore in FY23.