Ethos IPO GMP
Ethos consists entirely of an offer for the sale of ₹97.29 Crore by the promoters and PE investors. The issue has been priced in the band of Rs.836 to Rs.878 per share and the IPO allotment price will be discovered post the book building process completion.
The issue opened for subscription on 18th May and will close for subscription on 20th May. Check IPO Allotment Status of Ethos on 25th May. The stock is scheduled to list on 30th May. The GMP trading normally starts about 4-5 days prior to IPO opening and continues till the listing date.
In the above case, the grey market premium has remained at Rs.10. Of course, we’ll have to wait for the actual subscription numbers to flow in. If you consider the upper end of the price band of Rs.878 as the indicative price, then the likely listing price is being signaled at around Rs.888 per share (by adding the GMP premium to the upper end of the price band). One data point to track will be the subscription update on the stock as that would chart the GMP course from here.
Ethos IPO GMP
The GMP of Rs.10 on a likely upper band pricing of Rs.878 indicates a listing premium of a very robust 1.13% over the listing price. That presupposes a listing price of approximately Rs.888 per share, when Ethos actually lists on 30th May 2022.
There are 2 factors that impact the GMP. Firstly, market conditions have a deep impact on the GMP. Secondly, the extent of subscription also has a deep impact on the GMP as it is indicative of investor interest in the stock.
There is one small point to remember here. The GMP is not an official price point, it is just an informal price point. However, in most cases, it has proved to be a good informal indicator of demand and supply for the IPO. Hence it does give a broad idea of how the listing is likely to be and how the post-listing performance would be.
While the GMP is just an informal approximation, it has been generally seen to reflect the real story. More than the actual price, it is the GMP trend over time that really gives insights into which direction the wind is blowing.
GMP is an essential informal indicator of likely listing price, although it tends to be quite dynamic and changes direction with the flow of news. Here, investors must note that this is just an informal indication and has no official sanction. However, for traders who are in the stock for the short term, the GMP gives a reasonably good indication of the likely listing price and the likely listing returns on the IPO.
The catch is that this can grey market price can still keep changing depending on how the subscription pans out once the actual issue opens. That is why the trend of the GMP is as critical as the quantum of GMP.
DisclaimerInvestment/Trading is subject to market risk, past performance doesn’t guarantee future performance. The risk of trading/investment loss in securities markets can be substantial. Also, the above report is compiled from data available on public platforms.
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