InvestorQ : What are the grey market prices indicating for the 3 IPOs slated to hit the primary market during the current week?
diksha shah made post

What are the grey market prices indicating for the 3 IPOs slated to hit the primary market during the current week?

Answer
user profile image
Rashi Mehra answered.
4 weeks ago


A word of caution, first and foremost, is necessary. The grey market prices are not official prices but they are just indicative prices in the unofficial market where IPOs get traded before getting listed. Hence you must take these prices with an element of caution.

Nowadays, it is quite common to judge the attractiveness of the IPOs by checking the grey market premium of these stocks ahead of the IPO. Quite often they are fairly indicative of the likely listing that the company will get, although not necessarily of fundamentals.

Out of the 3 IPOs that are slated to hit the primary markets next week, Chemcon is trading at a grey market premium of a huge 93%. CAMS Ltd, the mutual fund registrar, commands a grey market premium of 28% while Angel Broking commands 16% premium.

It must be noted that the premium on Angel Broking has fallen sharply from 25% in the early part of the week to just 16% in the later part of the week. That is more because investors find broking companies less attractive compared to digital or specialty chemicals.

The IPOs of Happiest Minds and Route Mobile got oversubscribed by 151 times and 72 times respectively. Happiest Minds IPO justified the euphoria by listing at a 111% premium to the issue price last week. Route Mobile listing on 21 September could be critical.