Grey Market Premium of Aditya Birla Sun Life AMC Ltd IPO
The Rs.2,768.26 crore offer for sale of Aditya Birla Sun Life AMC Ltd consisted entirely of an offer for sale. The issue had been priced in the band of Rs.695 to Rs.712 per share and the price has been discovered at Rs.712. The issue had closed for subscription on 01-Oct and the basis of allotment had been finalized on 06-Oct.
Shareholders are expected to get their refunds on 07-Oct and their demat credits by 08-Oct and the stock is likely to list on Monday 11th October. Ahead of listing, one of the key parameters for evaluating the potential listing is the GMP or the grey market price.
A word of caution here. The GMP is not an official price point, just a popular informal price point. However, in most cases, it has proved to be a good informal gauge 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 be a good mirror of the real story. More than the actual price, it is the GMP trend over time that really gives the insights about the stock being upgraded or downgraded.
One of the key factors that impacts the GMP in most cases, is the extent of oversubscription. Now, Aditya Birla Sun Life AMC Ltd IPO was oversubscribed just about 5.25 times overall. On a granular basis, it was the QIB segment that led the way with 10.36X subscription while HNIs were 4.39X and Retail was 3.24X. That has made the GMP premiums robust, if not outstanding, in the informal trading market.
Check - Aditya Birla Sun Life AMC IPO Subscription Day 3
As per updates coming in on Thursday, 07-Oct, the Aditya Birla Sun Life AMC Ltd IPO is commanding a premium of Rs.35 over the issue price in the grey market. The GMP has spiked sharply in the last few days from Rs.10-20 to Rs.35 levels. The previous issue of Paras Defence had a phenomenal listing and the positive sentiments are expected to boost the sentiments surrounding the Aditya Birla Sun Life AMC IPO.
The current GMP of Rs.35 for Aditya Birla Sun Life AMC translates into a 4.91% premium over the discovered price of Rs.712. It also hints at a listing price of approximately Rs.747 when the stock lists on Friday 08-Oct. Of course, subsequent price performance will depend on HNI selling as well as institutional interest in the stock.
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