Grey Market Premium of Latent View Analytics IPO
The Rs.600 crore IPO of Latent View Analytics consisted of a fresh issue of Rs.474 crore and an offer for sale at Rs.126 crore. The issue had been priced in the band of Rs.190 to Rs.197 per share and the price has been discovered at Rs.197.
The issue opened for subscription on 10-Nov and closed for subscription on 12-Nov. The issue was subscribed 326.49 times overall. The stock is scheduled to list on Tuesday, 23rd November.
Most of the shares start trading in the grey market well ahead of the IPO opening, which offers important indicators. Ahead of the issue and ahead of listing, one of the key parameters for evaluating the potential IPO 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 over a period of time and which direction the wind is blowing.
Check - Latent View Analytics IPO - Subscription Day 3
One of the key factors that impacts the GMP in most cases, is the extent of oversubscription, and that is huge in this case at 326.49 times. The GMP premiums will largely predicate on the extent of oversubscription in each of the categories. That would make the GMP premiums robust in the informal trading market.
As per updates coming in on Wednesday, 17-Nov, the Latent View Analytics IPO is commanding a premium of Rs.690 over the issue price in the grey market. The GMP has doubled in just last 2 days from Rs.345 levels to Rs.690 levels. Of course, this GMP will keep changing between now and the actual listing date.
The current GMP of Rs.690 for Latent View Analytics IPO translates into a 250.25% premium over the upper price band of Rs.197, which is also the discovered price. It also hints at a listing price of approximately Rs.887 when the stock lists but this would be subject to continuous change.
GMP is an important informal indicator of likely listing price. However, investors must note that this is just an informal indication and has no official sanction.
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