RK Swamy IPO to open on Monday: What GMP signals ahead of subscription?

The company has fixed a price band of ₹270-288 per share for its ₹423-crore IPO, which closes on March 6. 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.

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 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.

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.

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.

RK Swamy posted a net profit of ₹7.93 crore and a revenue of ₹142.55 crore for the period ended on September 30 last year. The firm reported a net profit of ₹31.26 crore and sales of ₹299.91 crore for the financial year ended March 31 last year.

SBI Capital Markets, IIFL Securities and Motilal Oswal Investment Advisory are the merchant bankers to the IPO, while Kfin Technologies is the registrar.

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.