RK Swamy IPO List at 13% Discount, Leads to Subsequent Surge

On Tuesday, 12-Mar-2024 shares of RK Swamy IPO surprised the market by debuting at a discount despite initial analyst predictions of a premium listing. On the National Stock Exchange, RK Swamy stocks opened at ₹250 per share marking a 13% discount from the issue price of ₹288. Similarly, on the Bombay Stock Exchange, the shares opened at ₹252 reflecting a 12.50% discount. Analysts had anticipated a listing price range of ₹300-310 which did not materialize. However, post listing the scenario changed drastically as RK Swamy saw strong buying momentum causing prices to soar. The shares reached an intraday high of ₹284.90 on the NSE and ₹284.50 on the BSE, reflecting a 13% rise from the listing price.

RK Swamy IPO Subscription and IPO Details

Before its listing, RK Swamy IPO witnessed remarkable interest from investors during its Initial Public Offering. The IPO valued at ₹423.56 crore was oversubscribed over 25 times. The company received bids for 21.14 crore equity shares which is higher than the 82.32 lakh shares offered. Among the categories, Qualified Institutional Buyers subscribed 20.58 times while non institutional investors and retail investors showed interest in subscribing 34.24 times and 33.31 times respectively.

Read R K Swamy IPO Final Subscription at 25.94 times

RK Swamy's IPO comprised a fresh issue of equity shares worth ₹173 crore and an offer for sale of 87 lakh shares. Additionally, the company raised ₹82 crore from anchor investors including LIC MF, Bajaj Allianz Life Insurance Company, SBI General Insurance Company and Goldman Sachs Singapore PTE ODI. The funds raised will be used for various purposes RK Swamy Limited plans to utilize them for working capital requirements, capital expenditure on a DVCP studio and investments in information technology infrastructure.

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An Overview of RK Swamy Limited

Established in 1973, RK Swamy is a prominent integrated marketing services provider offering a range of services including creative, data analytics, media and market research. Its integrated marketing communications services cover areas such as creative and digital content, media, event planning, activation, buying and execution.

As of the second quarter of the financial year 2023-24, RK Swamy has been quite busy serving its clients. They've rolled out more than 438 creative campaigns showing their dedication to innovative marketing strategies.  Not only that they've also managed a massive amount of data, handling over 140 terabytes. On top of that they've conducted a whopping 1.44 million consumer interviews through various surveys showing their commitment to understanding their target audience.

Operating across 12 cities in three different business categories, RK Swamy has established a substantial presence. With over 2,500 employees spread across 12 offices and 12 field locations, they've built a robust infrastructure to support their operations. Their clientele includes some big names such as Dr. Reddy’s Laboratories, Havells India and Hindustan Petroleum Corporation among others. This diverse client base speaks to their reputation and expertise in the marketing services industry.

Final Words

The big question for investors right now is whether to hang onto their RK Swamy shares or exit at a loss. For those who were hoping for quick listing gains the initial disappointment might prompt them to sell off their shares. However, there's another side to consider. Investors who are more willing to take risks may hold for the medium to long term.