Grey market is loving it! Share premia soar for three new IPOs

New Delhi: The stellar debut of Happiest Minds Technologies on Dalal Street is weighing on the grey market premium of forthcoming issues in the Indian primary market.

Grey market premia for Route Mobile, Computer Age Management Services (CAMS), Angel Broking and Chemcon Speciality Chemicals are inching northwards as the hope of listing gains rises.

Route Mobile is likely to be listed on Monday. The issue was open for subscription between September 9 and 11 at a price band of Rs 345-350, and was subscribed 73.30 times. The grey market premium stood at Rs 240-250 per share on Thursday.

Grey market premium for CAMS and Chemcon Speciality Chemicals stood at Rs 340-350 and Rs 230-235, respectively. Both the issues will be open for subscription between September 21 and 23.

The unlisted shares of Angel Broking are showing a Rs 55-75 premium in the grey market. Brokerages dealing with unlisted shares felt the price band was around Rs 25-30 higher than what the grey market was expecting. The Rs 600 crore IPO will open for subscription on September 22.

Dealers of unlisted shares in the unofficial market are vouching for high levels of subscription and decent listing gains amid the ongoing buzz in the primary market.

Sagar Shah of Ascent Wealth Managers said these are small issues, but the fundamentals appear strong. There is a lot of appetite among the investors.

“Data of delivery volumes speaks the truth. Investors are pouring money in IPOs just for listing gains,” he said. “However, only a fraction of retail investors is getting the allotment.”

After the blockbuster listing, Happiest Minds joined the elite club of stocks along with Dmart and IRCTC that delivered above 100 per cent listing gains. Dealers in the grey market say there is a lot of liquidity in the market.

Abhay Doshi, a Gujarat-based dealer in unlisted shares, said investors want something on the table for themselves. “But they must value strong fundamentals," he said.

“Investors must understand that a 15-20 per cent upside on listing is a decent gain. Not every issue will double their money on debut. An IPO can be a short-term play, but it’s not your lottery ticket," he said.