Positron Energy IPO Day 3: Should you apply or not? GMP, subscription status and more

The Positron Energy IPO has garnered exceptional interest from all investor categories on the final day of bidding. The IPO, which opened on August 12, is set to close today. By 2:30 p.m., the IPO had received a total of 26,080,400 bids against the 1,362,600 shares offered, reflecting an impressive subscription rate of 191.40 times, according to Chittorgarh. 

Retail investors' portion was subscribed by 228.07 times, while non-institutional buyers and qualified institutional buyers (QIBs) saw subscriptions of 286 times and 56 times, respectively, as of 2:30 p.m. This IPO is a book-built issue valued at ₹51.21 crore, consisting of a fresh issue of 20.48 lakh shares with no offer for sale (OFS) component.

The allotment for the Positron Energy IPO is anticipated to be finalised on Friday, August 16, 2024. The IPO is scheduled to list on the NSE SME platform, with the tentative listing date set for Tuesday, August 20, 2024. The IPO's price band is set between ₹238 and ₹250 per share.

GMP signals bumper listing

As of today, the GMP for Positron Energy's IPO is ₹200 per share, indicating that the shares are expected to list ₹200 above their issue price. Based on this GMP and the IPO price, the estimated listing price of the shares is ₹450, representing an 80% premium over the issue price of ₹250 per share.

The grey market premium is the difference between an IPO’s issue price and its expected listing price in the unofficial market, reflecting investor sentiment and demand before the stock officially begins trading.

It is important to note that GMP is only a preliminary indicator of the listing price and should not be used as the sole basis for investment decisions.

About Positron Energy

The company is engaged in management & technical advisory services in the oil and gas industry. It provides end-to-end solutions for gas distribution to industries across India. It provides management consultancy services, like commercial and financial advisory, and technical services, including project management and O&M (operation and management) services, across the gas sector in India.

It has successfully developed a gas aggregation business volume of 35 MMSCM (approximately), especially natural gas. Its technical qualifications and empanelment with most industrial customers attest to its reliability and competence. Moreover, the distribution of natural gas is facilitated through common carrier pipeline networks operated by major public and private sector players in the Indian market, according to the company's DRHP report. 

Since its incorporation, the company has provided services to major companies that are engaged in the oil and gas sector, including both PSUs and private companies. It has demonstrated a prominent presence in the oil and gas sector and has developed significant expertise and competencies in this field, the DRHP report showed.

Secured access to on-demand natural gas through IGX membership

In addition to its operational endeavours, the business is secured with the Indian Gas Exchange (IGX) through its clearing member. This client membership enables it to source natural gas on-demand for its short-term requirements from the free market, where prices are determined through a transparent exchange mechanism.

Moreover, it also provides flexibility to offload excess gas if necessary. Its current portfolio includes a substantial daily volume of 4000-5000 MMBTU of gas from various sources. The company engage in long-term contracts linked to formulas determined through mutual discussions with its customers.

Should you apply for the IPO?

"Considering the growth trajectory in the oil and gas segment, the niche place created by this company with a virtual monopoly and the improved financial performance YoY make it a worthy bet. Based on FY24 earnings, the issue appears fully priced. Investors may park funds for the medium to long term," said Dilip Davda, the contributing editor at Chittorgarh.com.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.