Shriram Properties IPO: Latest GMP, subscription status. Should you subscribe?
Premium- Shriram Properties IPO GMP today is ₹10, which is ₹6 below its yesterday's grey market premium of ₹16, say market observers
Shriram Properties IPO opened for subscription on 8th December 2021 and it will remain available for subscription till 10th December 2021. The public issue has been subscribed 1.37 times by 2:08 PM on second date of its subscription. The public offer has been subscribed 7.12 times in the retail category, 0.12 times in the QIB category and 0.06 times in the NII category. After almost one and half day of Shriram Properties IPO subscription status, grey market is also giving signals in regard to this public issue. According to market observers, shares of Shriram Properties are trading at a premium of ₹10 in the grey market today.
Shriram Properties IPO GMP
As informed by market observers, Shriram Properties IPO GMP today is ₹10, which is ₹6 below its yesterday's grey market premium (GMP) of ₹16. They said that Shriram Properties share price falling in the grey market because of the tepid response by investors to the public issue. However, they expected Shriram Properties IPO subscription to pick up on Friday, last date to apply for the IPO.
What this GMP means?
Market observers said that GMP of a public issue simply means expected listing gain from the IPO. As Shriram Properties IPO GMP today is ₹10, it means grey market is expecting this issue to list at around ₹128 ( ₹118 + ₹10), which reflects par listing of the book built offer against its issue price of ₹110 to ₹118 per equity share.
Shriram Properties IPO subscribe or not
However, stock market experts maintained that GMP is an unofficial data and one should not take it so seriously. They said that it's financials of the company that matters not grey market performance. One should look at the balance sheet of the company rather checking daily GMP of the public issue.
Highlighting upon the financials of the real estate company; Ankur Saraswat, Research Analyst at Trustline Securities said, "Shriram Properties Limited, is a part of the Shriram Group, is one of the leading residential real estate development companies in South India. Most of the projects are in Bengaluru and Chennai so it is exposed to geographical concentration risk. Mounting debt burden is increasing financial risk, delay in the completion of ongoing and forthcoming projects cast doubt on its project execution capabilities and possible indication of liquidity issue. So, there is a continuous inventories buildup in balance sheet. Financial performance and return metrics are deteriorating over the years and pandemic has exacerbated this situation."
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Suggesting 'subscribe' to aggressive investors; Aayush Agrawal, Sr. Analyst at Swastika Investmart said, "The company's financials have been on a weaker note where revenues of the company are declining while the company turned loss-making since FY20. The company's revenues in FY19 were ₹723 crore, which fell to ₹501 crore in FY21, while it made a profit of ₹48 crore in FY19 and a loss of ₹67 crore in FY21. Despite strong brand recognition, the company has suffered losses during the COVID, when real estate and housing were booming. Being a loss-making company retail portion is 10 per cent. The IPO is arriving at a P/BV of 2.09x while the industry average is 3.69x which might attract minor listing gain. However, we believe that there are many reputable listed companies such as Sobha, Brigade, Prestige, etc., and only aggressive investors should apply for the IPO."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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