Supreme Facility Management Limited is a leading player in integrated facility management and support services, with over 40 years of experience in providing employee transportation, corporate food solutions, production support services, and supply chain solutions. With a strong focus on operational excellence, safety, and sustainability, the company has become a ‘One Stop Solution Provider’ for diverse corporate needs. Now, Supreme Facility Management is going public with its Initial Public Offering (IPO) on the NSE SME platform.

Supreme Facility Management IPO Overview

The Supreme Facility Management IPO is a book-built issue offering a fresh issue of 65.79 lakh shares at a price band of ₹72 to ₹76 per equity share. The IPO aims to raise ₹50 crores, and the funds raised will be used primarily to support the company’s working capital needs, pursue inorganic growth initiatives, and for general corporate purposes.

The IPO subscription period for the Supreme Facility Management IPO opened on December 11, 2024, and will close on December 13, 2024. The allotment date is set for December 16, 2024, and the shares are expected to be listed on the NSE SME on December 18, 2024.

IPO Subscription Status

As of 12:00 PM on December 11, 2024, the IPO has been subscribed 0.50 times on its first day. This indicates initial investor interest and suggests that the subscription rate will likely increase as the subscription period progresses.

Grey Market Premium (GMP) and Market Sentiment

The Grey Market Premium (GMP) of the Supreme Facility Management IPO stands at ₹15 as of December 9, 2024, showing an expected listing price of ₹91, compared to the issue price of ₹76. This translates to a 19.20% potential premium, which indicates positive market sentiment toward the company. While GMP can provide an early indication of market enthusiasm, actual price discovery can only occur after the shares are listed on the stock exchange.

Anchor Investor Support

The Supreme Facility Management IPO has garnered confidence from anchor investors, further bolstering its credibility in the market. However, the specific number of shares allotted to anchor investors has not been disclosed in this report.

Objectives of the IPO Funds

The funds raised through the IPO will be used for the following key business objectives:

1. ₹30 crore for funding the company’s working capital requirements.
2. ₹75 crore for inorganic growth initiatives, such as potential acquisitions or mergers to expand business capabilities.
3. The remaining funds will be used for general corporate purposes, strengthening the company’s position in the market.

Financial Performance

Supreme Facility Management has demonstrated consistent growth over the years. The company’s revenue from operations for FY24 was ₹9,932.76 Lakhs, with a profit after tax (PAT) of ₹272.08 Lakhs for the same period. Over the past few years, the company has shown significant improvement in its EBITDA and PAT, making it a solid candidate for investors looking for steady returns.

• EBITDA for FY24: ₹909.88 Lakhs
• PAT for FY24: ₹272.08 Lakhs
• Pre-issue P/E Ratio: 18.72x
• Post-issue P/E Ratio: 22.65x
• ROCE: 23.10%
• ROE: 21.29%

These financial metrics indicate that the IPO is fairly priced based on the company’s performance.

Retail Investment Details

The lot size for the Supreme Facility Management IPO is 1,600 shares, requiring a minimum investment of ₹1,21,600 for retail investors. High-net-worth individuals (HNIs) need to invest in 2 lots (3,200 shares), totaling ₹2,43,200.

Subscription and Allotment Process

Investors can check the IPO allotment status on the Registrar's website once the allotment date (December 16, 2024) is reached. By entering the application number, PAN, or DP Client ID, investors can easily determine whether they have been allotted shares.

Conclusion

With a strong promoter backing from Lalasaheb Vitthalrao Shinde and his family, Supreme Facility Management brings over four decades of expertise to the table. The company’s track record in safety, sustainability, and operational efficiency makes it an attractive investment option. Given the Grey Market Premium, the IPO appears poised for a potential listing gain and could be an appealing choice for long-term investors.

Investors looking for growth opportunities in the facility management and supply chain solutions sectors should consider subscribing to the Supreme Facility Management IPO for short-term listing gains.

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