Thinking Hats Entertainment Solutions IPO Launch: Key Details and Subscription Status on Day 1

Thinking Hats Entertainment Solutions Limited’s much-anticipated SME IPO opened for subscription on September 25, 2024, with investors closely monitoring its progress. The company aims to raise ₹15.09 crores through a fresh issue of 34,50,000 shares, with a price band of ₹42 to ₹44 per share and a minimum lot size of 3000 shares.

According to the IPO subscription status, the issue received a lukewarm response on the first day, with the overall subscription at 0%. The QIB, NII, and RII categories all remained unsubscribed as of the end of Day 1. However, it’s important to note that IPO subscriptions often pick up pace in the later stages, so investors should keep a close eye on the developments.

In the grey market, Thinking Hats Entertainment IPO GMP (Grey Market Premium) is currently trading at ₹15, indicating a premium of 34% over the upper end of the price band. The Kostak rate, which represents the premium one gets by selling their IPO application in an off-market transaction, is at ₹-. The subject to sauda, which refers to the minimum amount required for a transaction, is at ₹35,000.

Thinking Hats Entertainment: Company Profile and IPO Objectives

Thinking Hats Entertainment Solutions Limited has evolved from a premier event design and production company into an OTT content production and experiential marketing firm. The company offers a wide range of services, including event management, content development, retail merchandising, and tech-centric product development.The main objectives of the Thinking Hats Entertainment IPO are:

1. Prepayment or repayment of loans: The company intends to utilize ₹2 crores from the net proceeds to repay loans, reducing debt and lowering servicing costs.
2. Funding working capital requirements: ₹9 crores from the net proceeds will be used for working capital, with ₹7 crores allocated for Fiscal 2025 and ₹2 crores for Fiscal 2026.
3. General corporate purposes: The balance of the funds will be used for general corporate purposes, such as meeting operating expenses, strengthening business development and marketing capabilities, and addressing unforeseen exigencies.

Key Dates and Subscription Details

The Thinking Hats Entertainment IPO will remain open for subscription until September 27, 2024. The basis of allotment is expected to be finalized on September 30, 2024, and the shares are likely to be credited to demat accounts on October 1, 2024. The company’s shares are expected to be listed on the NSE SME platform on October 3, 2024.The issue is a Book Built IPO, with the following investor categories and quotas:

• Qualified Institutional Buyers (QIB): Not more than 9.97%
• Non-Institutional Investors (NII): Not more than 26.96%
• Retail Individual Investors (RII): Not more than 63.07%

Thinking Hats Entertainment Solutions IPO Risks and Challenges

While Thinking Hats Entertainment Solutions Limited has a strong track record and growth potential, investors should be aware of the following risks and challenges:

1. Heavy reliance on event management revenue: The company’s event management division contributes significantly to its revenue, making it vulnerable to client shifts to in-house management or competitive pricing from rivals.
2. Potential third-party liabilities: The company faces risks related to third-party liabilities, such as penalties for inadequate performance, personal injury, or property damage costs.
3. Seasonality impacts: The event management business is subject to seasonality risks, as extreme weather and reduced events can disrupt operations and increase costs.