Prudent Corporate IPO GMP
The Prudent Corporate Advisory Services consists entirely of an offer for the sale of ₹538.61 crore by the promoters and PE investors. The issue has been priced in the band of Rs.595 to Rs.635 per share and the IPO allotment price will be discovered post the book building process completion.
The issue opened for subscription on 10th May and will close for subscription on 12th May. Check IPO Allotment Status of Prudent Corporate Advisory services on 18th May. The stock is scheduled to list on 23rd May. The GMP trading normally starts about 4-5 days prior to IPO opening and continues till the listing date.
Prudent Corporate Advisory Services IPO GMP
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, 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 insights into which direction the wind is blowing.
In the above case, the GMP trend shows that the grey market premium has scaled up from Rs.30 per share to Rs.35 per share; in the last 2 days. Of course, we have to wait for the actual subscription numbers to flow in. But, clearly, this shows good interest in the grey market ahead of the IPO and that is broadly a positive signal.
If you consider the upper end of the price band of Rs.635 as the indicative price, then the likely listing price is being signaled at around Rs.670 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.
The GMP of Rs.35 on a likely upper band pricing of Rs.635 indicates a listing premium of a very robust 5.51% over the listing price. That presupposes a listing price of approximately Rs.670 per share, when Prudent Corporate Advisory Services IPO actually lists on 23rd May 2022.
GMP is an important 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.
Tags:- Prudent Corporate IPO GMP, IPO allotment price, IPO Allotment Status, GMP trend shows, IPO
DisclaimerInvestment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
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