About the Alpex Solar IPO
The stock of Alpex Solar IPO has a face value of ₹10 per share and it is a book building issue. The price band for the book building issue is set from ₹109 to ₹115 per share. Being a book built issue, the price will be discovered in the above band. The IPO of Alpex Solar Ltd has only a fresh issue component and no offer for sale (OFS) portion. It must be remembered that the fresh issue portion is EPS dilutive and equity dilutive, but OFS is just a transfer of ownership. As part of the fresh issue portion of the IPO, Alpex Solar IPO will issue a total of 64,80,000 shares (64.80 lakh shares), which at the upper band of IPO price of ₹115 per share aggregates to fresh fund raising of ₹74.52 crore.
Since there is no offer for sale (OFS) portion, the fresh issue size will also double up as the overall IPO size. Therefore, the overall IPO size will also comprise of the issue of 64,80,000 shares (64.80 lakh shares) which at the upper band IPO price of ₹115 per share will aggregate to overall IPO size of ₹74.52 crore. Like every SME IPO, this IPO also has a market maker inventory allocation of 3,24,000 shares. SS Corporate Securities Private Ltd will be the market maker to the issue to provide two-way quotes to ensure liquidity and low basis costs post listing. Post-IPO, promoter stake in Alpex Solar Ltd will dilute from 93.53% to 68.76%.
The fresh issue funds will be used by the company towards capex for upgrading and expanding existing solar module facility and for capex of new manufacturing facility to make aluminium frames for solar modules. Part of the proceeds will also be used to fund working capital gaps and for general corporate purposes. Corporate Capital Ventures Private Ltd will be the lead manager to the issue, and Skyline Financial Services Private Ltd will be the registrar to the issue. The market maker for the issue is SS Corporate Securities Private Ltd.
About the GMP pricing for Alpex Solar IPO Solutions
The grey market price (GMP) trading normally starts about 4-5 days prior to IPO opening and continues till the listing date. In the case of Alpex Solar Ltd, we already have GMP data for the last 2 days, which should give a reasonable picture of the likely listing.
There are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP, especially the liquidity conditions in the market. Secondly, the extent of subscription for the IPO has a deep impact on the GMP as it is indicative of investor interest in the stock. GMP can also technically be in negative, which means the stock would list at a discount to the issue price.
There is one small point to remember here. The GMP is not an official price point, just a popular informal price point. However, in most cases, it has been observed to be a good informal gauge of demand and supply for the IPO. Hence it does give a broad idea of how the listing is likely to be and how the post-listing performance of the stock would be.
How has the GMP panned out in last few days
GMP tends to be a good mirror of the real stock story. More than the actual price, it is the GMP trend over time that gives insights about which direction the wind is blowing. Here is a quick GMP summary for Alpex Solar IPO for which the data is available.
Price Range: ₹109 to ₹115
Date. 8-Feb-24
GMP. ₹190
Expected Gains. 165.22%
Investment is subjected to market risk
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