Paradeep Phosphates IPO fully subscribed; What GMP signals as subscription ends
Premium- Paradeep Phosphates IPO GMP today is ₹3, which is unchanged from its yesterday evening's grey market premium of ₹3 per equity share
Paradeep Phosphates IPO: The ₹1501.73 crore initial public offer (IPO) gets fully subscribed during the trading hours of Thursday. The issue recorded robust demand from Qualified institutional buyers (QIBs) and retail individual investors (RII) appetite for this IPO as the categories stood oversubscribed. The IPO will close today for public subscription.
As per NSE's data, the IPO received cumulative bids of 42,52,00,650 equity shares against the offered size of 26,86,76,858 equity shares - subscribing by 1.58 times.
The qualified institutional buyers' portion showed stellar demand by oversubscribing 2.85 times, while the portion kept for retail investors oversubscribed by 1.26 times. However, the portion allocated to non-institutional investors saw lackluster demand as the category was only subscribed by 52% of the reserved size.
The IPO opened for subscription on 17th May 2022 and it will remain open for bidding till 19th May 2022. The issue is a 100% book building and has a price band of ₹39 to ₹42 per equity share. The bid lot is in 350 Equity Shares and in multiples thereof.
Meanwhile, shares of Paradeep Phosphates have remained steady for fourth successive day in grey market. According to market observers, Paradeep Phosphates share price is quoting at a premium of ₹3 in the grey market today.
Paradeep Phosphates IPO GMP today
Market observers said that Paradeep Phosphates IPO GMP (grey market premium) today is ₹3, which is unchanged from its yesterday evening's grey market premium of ₹3 per equity share. They said that grey market sentiment for Paradeep Phosphates IPO has remained steady for fourth successive day and expected some rise in Paradeep Phosphates IPO GMP today as secondary market has been signaling trend reversal for last two successive sessions.
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What this GMP mean?
Market observers said that Paradeep Phosphates IPO GMP today is ₹3 that means grey market is expecting that Paradeep Phosphates IPO listing would be around ₹45 ( ₹42 + ₹3), which is around 7 per cent higher from Paradeep Phosphates IPO price band of ₹39 to ₹42 per equity share.
So, grey market is signaling that Paradeep Phosphates IPO may have a moderate listing as the public issue has remained steady in grey market despite volatility in secondary market.
However, stock market experts asked investors to look at the fundamentals instead of grey market premium of the company. They said that grey market represents an unofficial information, which is non regulated. It is financials of the company that gives clear picture of the company's fundamentals.
Paradeep Phosphates IPO: Should you subscribe?
Giving subscribe tag to Paradeep Phosphates IPO, Astha Jain, Senior Research Analyst at Hem Securities said, "Company is bringing the issue at price band of ₹39-42 per share at p/e multiple of 11x on FY21 eps basis. Company being second largest private sector manufacturer of Phosphatic fertilizers in India is well-positioned to capture favorable Indian fertilizer industry dynamics supported by conducive government regulations. Company with established brand name backed by an extensive sales and distribution network has strong parentage, experienced management team and prominent shareholders is looking decent investment avenue for long term investment. Hence we recommend “Subscribe" on issue for long term."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.