Studio LSD Limited, a dynamic Mumbai-based multimedia production company that creates original content for television and OTT platforms, has launched its much-awaited ₹70.13 crore IPO. The issue opened on August 18, 2025 and closes on August 20, 2025, with the shares scheduled to list on the NSE SME platform on August 25, 2025. The IPO comprises a fresh issue of ₹56.10 crore and an offer for sale of ₹14.03 crore, with a price band of ₹48–₹51 per equity share.

The IPO witnessed a reasonably strong response from investors, with a subscription of 2.47 times as of 10:30 AM on the final day of bidding. However, despite this interest in the primary market, the Grey Market Premium (GMP) for Studio LSD remains at ₹0, indicating lack of speculative demand and suggesting that investors should temper expectations for a strong listing pop.

Business Overview and Growth Momentum

Studio LSD has positioned itself as a content-driven production house that specialises in original storytelling across multiple genres, catering to audiences nationwide through partnerships with both broadcasters and OTT platforms. The company is led by Prateek Sharma and Parth Shah, who bring a sharp focus on genre innovation combined with traditional narrative formats, helping the company gain visibility in a competitive media landscape.

The company’s financial performance has shown strong improvement:

This reflects more than double jump in topline from FY23 to FY24 and consistent profitability in FY25. Return ratios are impressive, with ROCE at 57.29% and ROE at 53.78%, underlining the company’s efficient capital utilisation.

Valuation and Investment Considerations

While Studio LSD has exhibited strong growth, valuation metrics suggest that the IPO is fully priced:

• Pre-issue EPS: ₹2.85

• Post-issue EPS: ₹2.25

• Post-issue P/E: 22.68x

• Industry P/E: 14x

This means that investors are paying a significant premium relative to the industry average, which may limit immediate upside potential. The IPO proceeds will be used for capital expenditure (₹18 crore), working capital (₹24.92 crore), and general corporate purposes, which are typical use cases for a growing production house.

Market Sentiment and Analyst Outlook

The content creation and entertainment sector continues to benefit from strong secular trends, including rising OTT penetration, evolving audience preferences, and robust marketing spends by streaming platforms. However, analysts note that SME issues often react sharply to valuation and near-term liquidity trends, making GMP a useful barometer for assessing sentiment ahead of listing.

With the GMP currently at zero and the IPO valuation already at the higher end of the price-to-earnings spectrum, analysts advise investors to exercise caution if they are entering the IPO with the objective of making a short-term listing gain. On the other hand, investors with a longer-term view and conviction in the media and entertainment content space may consider the IPO given the company’s consistent growth, scalable business model and strong ROE profile.

Conclusion

The Studio LSD IPO brings to market a rapidly growing content production company with an attractive operational profile and strong leadership. While its financial performance shows healthy revenue expansion and high return metrics, the post-issue valuation appears expensive compared to industry peers. With no visible Grey Market Premium and a subscription trend that suggests modest interest rather than exuberance, the IPO may not provide notable listing gains in the short term.

Long-term fundamentals remain positive, but investors focusing purely on listing day performance are advised to remain cautious.

The Upcoming IPOs in this week and coming weeks are NIS Management, Sattva Engineering Construction, Globtier Infotech, Current Infraprojects, Anondita Medicare, Classic Electrodes (India), Vikran Engineering, Shivashrit Foods, ARC Insulation & Insulators.

The Current active IPO are Mangal Electrical Industries, LGT Business Connextions, Vikram Solar, Gem Aromatics, Shreeji Shipping Global, Patel Retail, Studio LSD.

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