Why Shree Ram Twistex IPO Allotment Might Feel Like a Loss Already

Last Updated on February 26, 2026 by Rajat Bhati

In the world of investing, there is a thin line between “profit” and “loss.” If you don’t follow the rules, your greed can wipe away all your profits. A recent example of this is the Shree Ram Twistex IPO GMP trap. Thousands of retail investors placed bids after seeing the rise in GMP, and now that its GMP is negative, they find themselves on the other side of that line. What seemed like a profitable opportunity for listing gains turned out to be a bad lesson in market psychology, as the Grey Market Premium (GMP) fell from a high of 13% premium to a discount of INR 10 in less than 24 hours.

Shree Ram Twistex IPO Allotment Day Shock

On 25 February, the final day of bidding, the grey market was buzzing with a 13% premium, signaling a “safe” listing. However, as soon as the retail money was locked in and allotment began today (Feb 26), the premium didn’t just dip—it dove into negative territory.

The current INR 10 discount means investors are now looking at an immediate capital erosion of nearly 10% before the shares even hit the exchanges on 2 March.

Shree Ram Twistex IPO GMP Trap: Subscription Bait

The primary tool used to trap retail investors was the “Institutional Illusion.” By the end of Day 3, the NII (Non-Institutional Investor) portion was oversubscribed by a massive 220.30 times.

• The Logic: Retailers often assume that if “big money” is bidding 220x, the company must be a winner.
• The Reality: High NII subscription is frequently driven by short-term “IPO Financing” where HNIs bet solely on the GMP. They aren’t looking at the balance sheet; they are looking at the exit gate.

Negative Consensus on Shree Ram Twistex IPO

While the grey market was painting a “Green” picture, major brokerages like GEPL Capital were flashing a “Red” signal with a clear “AVOID” rating, and Capital Market gives a rating of 38/100. While some other brokerages did not even consider it worthy to cover. The consensus among analysts was overwhelmingly negative due to several structural flaws:

• Extreme Revenue Concentration: A staggering 93.48% of the company’s revenue comes from a single state—Gujarat. Furthermore, 80% of its business depends on just 10 clients.
• Stagnant Performance: Despite the hype, the company’s revenue and PAT (Profit After Tax) margins have been described as “flattish” for the last two years.
• Thin Margins: With an OPM (Operating Profit Margin) of just 8.20%, the company has very little “margin for error” compared to its more efficient competitors.

The Valuation Math: Paying for Gold, Getting Lead

The most glaring red flag was the valuation. At the upper price band of INR 104, the company asked for a P/E (Price-to-Earnings) ratio of 29.7x.

Investors essentially paid 4 to 5 times more for a smaller, regionally concentrated player than they would have for established industry giants. This valuation gap is the mathematical reason why the “Trap” was inevitable.

Lessons from the Rubble

The Shree Ram Twistex case proves that GMP is a speculative opinion, but the Balance Sheet is a mathematical fact. Retail investors were trapped because they chose the “Easy Screen” (Grey Market) over the “Hard Report”.

“Anti-Trap” Checklist for the Next IPO:

1. Peer Comparison: If the IPO is significantly more expensive than its listed peers, the listing gain is a gamble, not a guarantee.
2. Check the “Avoid” Rationale: Don’t just look at the rating; look at why analysts are saying “Avoid”.
3. Ignore Last-Day GMP Spikes: Artificial spikes on the final day are often used to lure retail applications.

Final Words

With the shares expected to list at a discount, investors should avoid the “Sunken Cost Fallacy”—the urge to hold a bad business just because you are in a loss.

• Exit Strategy: If you applied only for listing gains, follow a strict stop-loss.
• Long-term Caution: Given the 29x valuation and stagnant growth, “averaging down” could lead to further capital blockage.