Why Did Poojaa Precision Engineering IPO List at a 56.15% Premium Despite Missing GMP Expectations?

Poojaa Precision Engineering Limited made a strong debut on the BSE SME platform, listing at ₹470 against its issue price of ₹301, delivering a 56.15% listing gain to IPO investors.

Despite the impressive debut, the stock listed below grey market expectations. The last reported Grey Market Premium (GMP) of ₹200 had indicated a potential premium of around 66.45% over the issue price. GMP had also touched as high as ₹300 during the IPO period before cooling ahead of listing.

So, despite an exceptional 259.42x subscription, Poojaa Precision's 56.15% listing gain still fell short of the 66.45% premium implied by the final GMP. What explains this divergence?

Before diving into the analysis, you can also read our Poojaa Precision Engineering IPO Review for a detailed assessment of the company's financials, valuation, strengths, risks and IPO details.

Listing Snapshot Poojaa Precision Engineering Limited

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Investor Demand Surged, but GMP Cooled Before Listing

Investor sentiment towards Poojaa Precision Engineering strengthened sharply during the three-day subscription period. The IPO was subscribed 7.93x on Day 1, jumped to 59.03x on Day 2, and finally closed at an exceptional 259.42x, showing that demand accelerated dramatically as the issue progressed.

The demand was also broad-based. NIIs led with 342.50x subscription, followed by Retail Investors at 247.55x and QIBs at 206.46x.

Such strong participation across all three categories indicated that the IPO's demand was not concentrated in a single investor segment.

Grey market sentiment followed a similarly strong—but more volatile—trajectory. The GMP climbed from ₹125 to a peak of ₹300, before correcting sharply and eventually settling at ₹200 ahead of listing.

Even after this cooling, the final GMP represented around 66.45% of the ₹301 issue price, indicating that expectations for the listing remained exceptionally high.

This divergence is important: subscription demand continued to accelerate, while GMP had already retreated substantially from its peak. The ₹470 listing ultimately delivered a strong 56.15% gain, but the pre-listing cooling in GMP had already signalled that the market's earlier expectations were moderating.

For the latest grey market updates across active IPOs, visit our IPO GMP Today page. You can also track QIB, NII and retail demand through our Day-wise IPO Subscription Status page.

Strong Financial Growth Strengthened the Listing Case

Poojaa Precision Engineering entered the IPO with strong financial momentum. Total Income increased from ₹174.59 crore in FY24 to ₹295.20 crore in FY26, representing growth of about 69% in two years.

Profitability grew even faster. Profit After Tax (PAT) increased from ₹16.10 crore to ₹30.90 crore, a rise of nearly 92%, while EBITDA increased from ₹27.45 crore to ₹51.78 crore, growing by approximately 89% over the same period.

The FY26 PAT margin stood at 10.52% and EBITDA margin at 17.62%.

Total Income Grew 69% in Two Years

PAT Nearly Doubled from FY24 to FY26

EBITDA Grew 89% Alongside Business Expansion

However, this expansion came with higher leverage. Total borrowings increased from ₹14.28 crore in FY24 to ₹41.16 crore in FY26, as the company used debt for capacity expansion and machinery financing.

Therefore, the pre-IPO financial picture combined rapid revenue and earnings growth with increasing capital requirements, an important factor when assessing the sustainability of the company's expansion.

Attractive Relative Valuation Added to Investor Appeal

Poojaa Precision Engineering entered the market at an implied P/E of 13.74x at the upper price band of ₹301, substantially below its listed peers—Alicon Castalloy at 31.49x, RICO Auto Industries at 36.29x, and Endurance Technologies at 39.52x.

The valuation discount was accompanied by strong capital efficiency.

Poojaa reported a Return on Net Worth (RoNW) of 23.21%, compared with 5.48% for Alicon Castalloy, 6.68% for RICO Auto Industries, and 13.91% for Endurance Technologies.

This meant the company entered the IPO at a considerably lower earnings multiple while reporting a higher return metric than its larger listed peers.

However, the comparison requires context: Poojaa's ₹295.20 crore total income was significantly smaller than these established peers. Even so, the combination of 13.74x P/E, 23.21% RoNW, and rapid earnings growth likely made the IPO's relative valuation particularly attractive and may help explain the exceptionally strong investor demand.

Fresh Issue Was Primarily Growth-Oriented

Poojaa Precision Engineering's ₹160 crore IPO was entirely a Fresh Issue, meaning the proceeds were intended for the company rather than being paid to existing shareholders through an Offer for Sale (OFS).

The largest allocation, ₹106.33 crore, is earmarked for establishing a new manufacturing facility (Unit III) in Pune, while approximately ₹30 crore will support incremental working capital requirements. The remaining proceeds are intended for general corporate purposes.

This made the IPO predominantly expansion-driven: investors were funding additional manufacturing capacity and working capital at a time when Total Income, PAT and EBITDA were already growing rapidly.

However, the sizeable Unit III investment also introduces execution risk, making the company's ability to translate the new capacity into future revenue and earnings an important factor to monitor.

If you're unfamiliar with terms such as Fresh Issue, OFS, GMP, QIB, NII or RII, our IPO Glossary explains 100+ commonly used IPO terms.

Business Strengths Appeared to Outweigh Key Risks

Poojaa Precision Engineering benefited from growing exposure to the EV segment, where revenue increased from ₹10.64 crore to ₹28.82 crore, alongside its integrated manufacturing capabilities and 13,800 MT combined melting capacity.

However, risks remained significant: over 70% of revenue came from the top five customers, while aluminium accounted for up to 76% of raw materials consumed. The ₹106.33 crore Unit III expansion also carried execution risk.

Despite these concerns, the 259.42x subscription suggests investors placed greater weight on the company's rapid earnings growth, attractive valuation, high RoNW and expansion potential.

Why Did Poojaa Precision Engineering IPO List at a 56.15% Premium Despite Missing GMP Expectations?

Poojaa Precision Engineering's 56.15% listing gain appears to have been supported by the convergence of rapid earnings growth, attractive relative valuation and exceptional investor demand. PAT nearly doubled, the IPO was priced at 13.74x P/E, and subscription reached 259.42x, creating a strong setup for listing.

However, the GMP had already fallen from its ₹300 peak to ₹200 before listing, signalling moderation in expectations. The eventual ₹470 listing therefore delivered an exceptional return, but at 56.15%, it remained below the 66.45% premium implied by the final GMP.

Key Takeaways

• Issue Price: ₹301
• Listing Price: ₹470
• Listing Gain: 56.15%
• Final GMP: ₹200, implying a 66.45% premium
• Overall Subscription: 259.42x
• Primary Drivers: Rapid earnings growth, attractive relative valuation, high RoNW, and exceptional investor demand.
• Why It Missed GMP: GMP had already cooled sharply from its ₹300 peak before listing, indicating moderation in market expectations.
• Key Risks: Customer concentration, aluminium price exposure, and execution risk associated with the Unit III expansion.

Related IPO Resources

• Poojaa Precision Engineering IPO Review
• IPO GMP Today
• Day-wise IPO Subscription Status
• IPO Allotment Status
• Latest IPOs
• IPO Glossary
• IPO Market Analytics & Research
• Indo-MIM IPO Listed at 44.33% Premium: Here's Why
  

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