Vedant Fashions IPO: What GMP, subscription status reflect about public issue
Premium- Vedant Fashions IPO GMP today is ₹13, which is ₹5 lower from its yesterday's grey market premium of ₹18, say market observers
Vedant Fashions IPO opened for subscription on 4th February 2022 and it will remain open for bidders till 8th February 2022. After first day of bidding, Vedant Fashions IPO subscription status suggests that the public issue worth ₹3,149.19 crore got subscribed 0.14 times whereas its retail portion got subscribed 0.22 times. According to market observers, trend reversal in the secondary market and tepid response by bidders has affected Vedant Fashions share price in the grey market. They said that shares of Vedant Fashions are available at a premium of ₹13 in grey market today, which was around ₹42 ahead of the subscription opening.
Vedant Fashions IPO GMP
Market observers went on to add that Vedant Fashions IPO GMP today is ₹13, which is ₹5 lower from its yesterday's grey market premium of ₹18. They said that slide in Vedant Fashions IPO grey market price can be attributed to two reasons — trend reversal in stock market and tepid response by bidders. However, they said that there are still two days for bidding is left and there can be spike in Vedant Fashions IPO subscription status if there is any change in market sentiment. However, they also said that 100 per cent offer for sale (OFS) is an another hurdle that might work as an impediment in pulling the morale of investors.
What this GMP mean?
Market observers said that GMP is nothing but an estimated idea about the listing premium one can expect from a particular public issue. As Vedant Fashions IPO GMP today is ₹13, it means grey market is expecting that Vedant Fashions shares would list around ₹879 ( ₹866 + ₹13), which is almost at par with the price band of the public issue of ₹824 to ₹866 per share.
However, secondary market experts maintained that GMP is not an ideal indicator of expected listing gain from an IPO. They advised investors to look at the financials of the company as they indicate concrete idea about the financial status and business model of the company.
Speaking on the fundamentals of the company; Ravi Singh, VP and Head of Research at Share India said, "Vedant Fashions commonly known as Manyavar is a well known name in a market of celebration wear. However, the financials are not promising and in downward direction since Covid-19 pandemic. The company's total assets and profit margins have also reduced. The IPO price band seems at higher side as compared to the valuations."
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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