The initial public offer (IPO) of RK Swamy continued to witness strong demand from investors, who bought 25.61 times the offer size so far on the third and final day of the bidding process. The issue closes for subscription on Wednesday.
Investors booked 21.08 crore equity shares against IPO size of 82.32 lakh equity shares, according to the subscription data available with the exchanges.
Non-institutional investors' or high networth individuals led the bidding process booking 34.14 times the allotted quotas, while retail investors picked 32.52 times. Qualified institutional investors, meanwhile, bought 20.58 times the portion set aside for them. The employee portion was also booked 2.40 times.
Analysts mostly have assigned a 'Subscribe for long term' rating to the IPO, considering the company's strong track record of 15 year in the Data Analytics and Marketing Technology segment, well-diversified customer base and strong management.
RK Swamy IPO price band
The company has fixed a price band of ₹270-288 per share for its ₹423-crore IPO. Investors can make bids for 50 shares in one lot and multiples thereafter.
At the upper band price, the total issue size will be at ₹423 crore and the total market capitalisation of the company is pegged at ₹1,450 crore.
RK Swamy IPO size
The IPO will be a mix of fresh shares worth ₹173 crore, and an offer-for-sale (OFS) of 87 lakh equity shares by promoters and investors.
Promoters Srinivasan K Swamy, and Narasimhan Krishnaswamy will be selling 17.88 lakh equity shares each in the OFS, while investors Evanston Pioneer Fund LP will be offloading 44.45 lakh equity shares and Prem Marketing Ventures LLP 6.78 lakh equity shares via the OFS.
The promoters own 84.44% shares in RK Swamy, and the rest 15.56% shares are held by the selling public shareholders Evanston Pioneer Fund LP, and Prem Marketing Ventures LLP. Prem Marketing Ventures LLP will be exiting the marketing services provider after the issue.
RK Swamy IPO objective
RK Swamy will spend ₹54 crore of the net fresh issue proceeds for working capital requirements. In fact, the fund size required for working capital has been reduced to ₹54 crore, from ₹87 crore earlier.
Further, ₹10.98 crore will be used for setting up a DVCP studio, ₹33.34 crore for investment in IT infrastructure development, and ₹21.74 crore for setting up of new CEC and CATI of the company.
RK Swamy IPO structure
About 75% of the net offer has been reserved for the qualified institutional investors (QIBs), while non-institutional investors (NIIs) will get 15% of shares. Retail investors will get 10% of the net offer. The company has reserved shares worth ₹7.50 crore for eligible employees of the company, who will get a discount of ₹27 per share during the bidding process.
Company overview
RK Swamy Ltd is the largest Indian majority-owned integrated marketing services provider in India, offering a single-window solution for creative, media, data analytics, and market research services.
During fiscal 2023, one of India's pioneering advertising agencies RK Swamy released over 818 creative campaigns on behalf of clients across various media outlets, handled over 97.69 terabytes of data, and conducted over 2.37 million consumer interviews across quantitative, qualitative, and telephonic surveys.
Financials
RK Swamy reported a net profit of ₹7.93 crore and a revenue of ₹142.55 crore for the period ended on September 30, 2023. The company clocked a net profit at ₹31.26 crore and sales of ₹299.91 crore for the financial year ended March 31, 2023.
RK Swamy IPO BRLM
SBI Capital Markets, IIFL Securities and Motilal Oswal Investment Advisory are the merchant bankers to the IPO, while Kfin Technologies is the registrar.
RK Swamy IPO allotment, listing
The allotment of shares will be done on March 7 and credit of shares to depository accounts will be on 11th. The stock will be listed on both BSE and NSE on March 12.
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