Sapphire Foods IPO: What GMP signals on second day of subscription
Premium- Sapphire Foods IPO GMP today is ₹90, which is ₹30 lower from its yesterday's grey market premium of ₹120, say market observers
Sapphire Foods IPO (Initial Public Offering) become open for subscription on 9th November 2021 and it will remain open for bidders till 11th November 2021. On second day of bidding, ₹2,073.25 crore public issue has been subscribed 63 per cent (at 10:57 AM on 10th November 2021), which is not so encouraging. Due to this tepid response by bidders, grey market has also gone flat in regard to this public issue. Shares of Sapphire Foods are trading at a premium of ₹90 in the grey market today.
Sapphire Foods IPO GMP
According to market observers, Sapphire Foods IPO grey market premium (GMP) today is ₹90, which is ₹30 lower from its yesterday's GMP of ₹120. They went on to add that for last one week, Sapphire Foods IPO GMP has remained above ₹100 making its high of ₹130. However, after the tepid response by bidders, grey market seems to have gone down flat in regard to this public issue. However, they expected some improvement in the Sapphire Foods IPO grey market price as bidding is expected to pick up momentum from the second half of second day of subscription opening date.
What this GMP mean?
Market observers went on to add that Sapphire Foods IPO GMP today at ₹90 reflects that grey market is expecting its listing at around ₹1270 ( ₹1180 + ₹90), which is around 7.50 per cent higher from its price band of ₹1120 to ₹1180 per equity share.
However, stock market experts are of the opinion that GMP is not the right criteria for subscribing any public issue. They advised investors to go by the company financials as it reflects concrete idea about the fundamentals of the company.
Advising investors to subscribe Sapphire Foods IPO; Saurabh Joshi, Research Analyst at Marwadi Shares and Finance Limited said, "Considering the TTM (June 2021) adjusted EBITDA of ₹1,823.74 on post issue basis, the company is going to list at a EV/EBITDA of 41.38 with a market cap of ₹74,980 mn while its peers namely Westlife Development is trading at a EV/EBITDA of 73.55. We assign Subscribe rating to this IPO as the company is a leading QSR brand with a substantial market presence and has a scalable new restaurant economic model for expansion. Also, it is available at reasonable valuation as compared to its peers."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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