Poojaa Precision Engineering’s SME IPO saw bids for over 1.25 crore shares on its opening day. The Rs 159.83 crore issue, which is open until July 30, drew significant interest from retail investors who oversubscribed their portion 5.57 times.
Detailed Coverage
Poojaa Precision Engineering launched its SME Initial Public Offering (IPO) on July 28, attracting strong early demand from investors. By midday, the company had received bids for 1,25,78,400 shares against an offer size of 38,10,400 shares, resulting in an overall subscription of more than three times. The issue, which is structured as a book-built offering, aims to raise Rs 159.83 crore through the sale of 53,10,000 fresh equity shares within a price band of Rs 285 to Rs 301.
Investor Participation and Demand
Retail investors were the primary drivers of the early demand, subscribing 5.57 times the shares reserved for them. Non-Institutional Investors (NIIs) also showed active participation, subscribing 2.77 times their allocated quota. This initial response reflects investor interest in the company’s expansion plans, though it is important to remember that SME IPOs can be more volatile than mainboard listings.
Expansion Plans and Financial Context
The company intends to use the capital raised from this IPO to fund major growth initiatives. A significant portion of the money will be spent on expanding the manufacturing capacity at its Unit III facility, specifically adding 15,000 metric tonnes per annum (MTPA) of melting capacity and 6,600 MTPA for component manufacturing and finishing. Additionally, the company plans to set up a new Unit IV dedicated to the production of magnesium-based precision components. These projects are intended to increase the company’s scale, though investors should monitor the risk of delays in implementation or potential cost increases common in large capital-intensive projects.
In terms of historical financial performance, Poojaa Precision Engineering reported a revenue of Rs 293.86 crore for the fiscal year 2025-26, with a profit after tax of Rs 30.90 crore.
Understanding Grey Market Activity
Some informal platforms have reported a grey market premium (GMP) for the stock, with unofficial trading suggesting a potential listing gain of around 94 percent. Investors should exercise caution with such data, as grey market premiums are speculative, based on unofficial trading, and do not provide a reliable guarantee of performance once the stock actually lists on the exchange. Furthermore, while high premiums may appear attractive, market conditions at the time of listing often play a decisive role in actual price discovery.
The SME IPO remains open for subscription until July 30. Following the close of the issue, investors should track the official allotment status and the final listing date, which will be determined by the exchange. The long-term performance of the stock will depend on the company's ability to effectively use the new capacity, manage its debt, and maintain profit margins in a competitive engineering sector.