All E Technolgies IPO GMP (Grey Market Premium)

All E Technologies IPO worth Rs. 48.20 crore comprises of a fresh issue of Rs. 43.78 crore and an offer for sale by promoters and early investors worth Rs. 4.42 crore. The total SME IPO of All E Technologies Ltd entails the issue of 53.552 lakh shares at a price band of Rs. 87 to Rs. 90 per share. At the upper end of the price of Rs. 90, the IPO aggregates to Rs. 48.20 crore. The stock has a face value of Rs. 10 and retail bidders can only bid in minimum lot size of 1,600 share each, entailing a minimum investment of Rs. 144,000 in the IPO. That is also the maximum that a retail investor can apply for in the IPO. For HNIs, the minimum lot size is of 2 lots comprising of 3,200 shares and worth Rs. 288,000. As per the terms of the offer, 50% of the net offer is reserved for QIBs, 35% for the retail investors and the balance 15% for HNI / NIIs. It is a book built issue with price discovery pending and Nikunj Stock Brokers Limited will act as the market maker for the SME IPO of All E Technologies Ltd.

The issue opens for subscription on 09th December 2022 and closes for subscription on 13th December 2022 (both days inclusive). The basis of allotment will be finalized on 16th December 2022 and the refunds will be initiated on 19th December 2022. In addition, the demat credits are expected to happen on 20th December 2022 and the stock is scheduled to list on 21st December 2022 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated. The grey market price (GMP) trading normally starts about 4-5 days prior to IPO opening and continues till the listing date. In the case of All E Technologies Ltd, we already have GMP data, which should give a reasonable picture of the likely listing.

There are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP, especially the liquidity conditions in the market. Secondly, the extent of subscription for the IPO has a deep impact on the GMP as it is indicative of investor interest in the stock. GMP can also technically be in negative, which means the stock would list at a discount to the issue price.

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 been observed 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 of the stock would be.

GMP tends to be a good mirror of the real stock story. More than the actual price, it is the GMP trend over time that gives insights about which direction the wind is blowing. Here is a quick GMP summary for All E Technologies IPO data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around Rs. 55, but has then dipped to Rs. 53 but has now jumped back to the Rs. 59 levels. Of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription and also watch the progress, as that would have a very significant impact on the GMP. In the past, stocks which got oversubscribed in the IPO also saw a very robust positive shift in the grey market pricing. For a start, All E Technologies Ltd has shown good traction in the grey market.

If you consider the price of the IPO upper band of All E Technologies Ltd at Rs. 90, then the likely listing price is being signalled at around Rs. 149 per share as per the GMP indicator on 08th December. This is dynamic and keeps changing. 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. 59 on a IPO price upper band of Rs. 90 indicates a listing premium of a healthy 65.56% for All E Technologies Ltd over the listing price. That pre-supposes a listing price of approximately Rs. 149 per share, when All E Technologies Ltd lists on 21st December 2022. Of course, these are approximations, so you must keep a margin of safety. However, that would depend on the GMP sustaining over the next few days after the issue opens. The best thing one can do with the GMP is to observe the trend closely as that gives the best hints on listing status. Focus on the time series trend than on numbers.

All E Technologies Limited was founded in the year 2000 as a Microsoft Business Applications and Digital Transformation company. It enables clients with Intelligent Business Applications via Microsoft Dynamics 365, Power Platform, Data and AI powered by Microsoft Azure and Collaboration platforms. It enables actionable insights from data.

The funds will be used for business expansion and acquisitions. The issue is being lead managed by Unistone Capital Private Limited. Skyline Financial Services Private Limited will be the registrars to the issue.