Grey Market Premium of Sapphire Foods Ltd IPO

Grey Market Premium of Sapphire Foods Ltd IPO

by 5paisa Research Team Last Updated: Dec 15, 2022 - 05:54 am 45.8k Views

The Rs.2,073.25 crore IPO of Sapphire Foods Ltd consisted entirely of an offer for sale of Rs.2,073.25 crore. The issue had been priced in the band of Rs.1,120 to Rs.1,180 per share and the price has been discovered at Rs.1,180. The issue opened for subscription on 09-Nov and closed for subscription on 11-Nov.

The issue was subscribed 6.6 times overall. The stock is scheduled to list on Monday, 22nd 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.

Check - Sapphire Foods India IPO subscription Day-3

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.

One of the key factors that impacts the GMP in most cases, is the extent of oversubscription. 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 Sapphire Foods Ltd IPO is commanding a premium of Rs.85 over the issue price in the grey market.

The GMP has fallen in the last ten days from Rs.125 levels to Rs.85 levels, where it has stabilized. Of course, this GMP will keep changing on a regular basis till the actual listing happens.

The current GMP of Rs.85 for Sapphire Foods Ltd IPO translates into a 7.20% premium over the upper price band of Rs.1,180, which is also the discovered price. It also hints at a listing price of approximately Rs.1,265 when the stock lists but this would be subject to constant change. GMP is an important informal indicator of likely listing price.

However, investors must keep in mind that this is just an informal indication and has no official sanction.

Also Read:- 

Upcoming IPOs in 2021

Upcoming IPOs in November 2021

Sapphire Foods India IPO - 7 Things to Know

How do you rate this blog?


Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Open Free Demat Account

Resend OTP
Please Enter OTP
Account belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Nifty Outlook for 8 June 2023

Post consolidating in a range for the last few days, Nifty resumed its uptrend and rallied higher led by broader market participation. The index surpassed the 18700 mark and ended well above that with gains of around seven-tenths of a percent.

  • Jun 07, 2023
Bearer Cheque

Introduction A bearer cheque is an efficient and adaptable financial tool. It is a method of payment where the cheque is made out to the owner or bearer of the document. Bearer cheques enable the holder to cash or deposit the cheque without any requirement for identification or endorsement, in contrast to other cheques payable to a specific person or business.

  • Jun 06, 2023
Best Indicators for Intraday Trading

Introduction Intraday trading, also known as day trading, is a fast-paced trading strategy where traders aim to take advantage of short-term price fluctuations in financial markets. To succeed in this highly competitive arena, traders rely on various best indicators for intraday to make informed decisions and maximize their chances of profitability.

  • Jun 06, 2023

Start Investing Now!

Open Free Demat Account in 5 mins

Enter Valid Mobile Number