Shriram Properties IPO - Grey Market Premium
5paisa Research Team
Last Updated: 10th December 2022 - 03:44 am
The Shriram Properties Ltd IPO of Rs. 600 cr consists of a fresh issue of Rs.250 crore and an offer for sale of Rs.350 crore. The issue has been priced in the band of Rs.113 to Rs.118 per share and the IPO allotment price will be discovered post the book building.
The issue opens for subscription on 08-Dec and closes for subscription on 10-Dec. The stock is scheduled to list on 20th December. The GMP trading normally starts about 4-5 days prior to IPO opening and continues till the listing date.
However, there are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP. Secondly, the extent of subscription also has a deep impact on the GMP as it is indicative of investor interest in the stock.
There is one small point to remember here. The GMP is not an official price point, just a popular informal price point. However, in most cases, it has proved to be a good informal gauge of demand and supply for the IPO. Hence it does give a broad idea of how the listing is likely to be and how the post-listing performance would be.
While the GMP is just an informal approximation, it has been generally seen to be a good mirror of the real story. More than the actual price, it is the GMP trend over time that really gives the insights about the stock being upgraded or downgraded over a period of time and which direction the wind is blowing.
A quick GMP summary for Shriram Properties Ltd over the last 4 days.
|
04-Dec |
05-Dec |
06-Dec |
07-Dec |
|
Rs.20 |
Rs.20 |
Rs.20 |
Rs.20 |
In the above case, the GMP trend has been constant at Rs.20 over the last 4 days with no change in the grey market premium. Of course, we have to await for the actual subscription numbers to flow in. But, clearly this shows reasonable interest in the grey market ahead of the IPO.
If you consider the upper end of the price band as the indicative price, then the likely listing price has remained constant at Rs.138, where it appears to have stabilized. One data point to track will be the listing of Star Health IPO on 10-December, which got just 79% subscribed and had to reduce the size of the IPO by Rs.839 crore. That could hold the key to IPO market sentiments.
The GMP of Rs. 20 on a likely upper band pricing of Rs.118 indicates a listing premium of 16.95% over the listing price. That presupposes a listing price of approximately Rs.138 per share, when the stock lists on 20th December. However, GMP is a dynamic price.
GMP is an important informal indicator of likely listing price, although it tends to be quite dynamic and changes direction with the flow of news. However, investors must note that this is just an informal indication and has no official sanction.
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Sachin Gupta
5paisa Research Team
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