Grey market premiums soar for current IPOs even before close




In the grey market, IPO applications are bought and sold before they are available for trade on stock exchanges. NSEBSESREI InfrastructureLoading data…

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      ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIES As big-ticket IPOs of insurance majors ICICI Lombard and SBI Life add momentum to initial share sales in India this month, the Dixon Technologies and Matrimony.com issues have livened up Mumbai’s grey market, with both stocks commanding huge premiums ahead of their sale-window closures.

      For Dixon Technolo gies, a Rs 600-crore issue on the upper price band of Rs 1,766 per share, the grey market witnessed a premium of Rs 650 per share Thursday. The issue will close Friday. While the qualified institutional buyers’ portion was subscribed 9 times on the second day, the shares reserved for retail investors were subscribed 3.3 times. However, the quota for high-net-worth individuals is yet to be subscribed fully.

      Matrimony.Com announced its IPO early this week, and the grey market premium quoted Thursday was Rs 150.The IPO is priced in the range of Rs 983-985. Matrimony.com plans to raise about Rs 500 crore, and its issue will be open between September 11 and 13.

      In the grey market, IPO applications are bought and sold before they are available for trade on stock exchanges. If the shares list at a premium to the offer price, the participant in the grey market makes a profit. The market is usually tracked to get a sense of the listing prospects.

      Srei Infrastructure Finance-led Bharat Road Network IPO is currently quoting at a premium of Rs 15 per share. The company will raise Rs 600 crore by selling up to 2.93 crore shares in the Rs 195-205 price range. The issue will close Friday. “Investors are back in action after they failed to make money in the last two issues (Cochin Shipyard and SIS India) in July and August that listed below grey market prices,“ said a broker.

      Cochin Shipyard IPO traded at a premium of Rs 160 over its offer price of Rs 432 in the grey markets, but the stock listed at Rs 435. Similarly, SIS India, which commanded a premium of Rs 80 on grey market, listed at Rs 875, Rs 65 more than its offer price of Rs 815.

      However, two June IPOs -AU Small Finance Bank and CDSL -listed at 47 per cent and 68 per cent premiums, respectively , over their offer prices, and higher than their grey market premiums.




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