Anlon Technology IPO GMP (Grey Market Premium)

Anlon Technology IPO worth Rs. 15.00 crore, comprises entirely of a fresh issue of the IPO amount. The total SME IPO of Anlon Technology Solutions Ltd entails the issue of 15.00 lakh shares at a price band of Rs. 95 to Rs. 100 per share aggregating to Rs. 15.00 crore at the upper end of the price band. The stock has a face value of Rs. 10 and retail bidders can only bid in minimum lot size of 1,200 share each, entailing a minimum investment of Rs. 120,000 in the IPO at the upper price band. That is also the maximum that a retail investor can apply for in the IPO.

For HNI / NII investors, the minimum investment is 2 lots of 2,400 shares aggregating to Rs. 240,000. As per the terms of the offer, 50% of the net offer is reserved for QIB (qualified institutional buyers), 15% for HNI / NII investors and the balance 35% for the retail investors. It is a book built issue and the IPO price will be discovered through the book building process. Rikhav Securities Ltd will act as the market maker for the IPO.

The issue opens for subscription on 29th December 2022 and closes for subscription on 02nd January 2023 (both days inclusive). The basis of allotment will be finalized on 05th January 2023 and the refunds will be initiated on 06th January 2023. In addition, the demat credits are expected to happen on 09th January 2023 and the stock is scheduled to list on 10th January 2023 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 Anlon Technology Solutions Ltd, we already have Anlon Technology IPO 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 Anlon Technology Solutions Ltd, data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around Rs. 40-42, but has then jumped to Rs. 60 on Monday 9th January 2022. 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, Anlon Technology Solutions Ltd has shown good traction in the grey market.

If you consider the price of the IPO of Anlon Technology Solutions Ltd at Rs.59, then the likely listing price is being signalled at around Rs. 159 per share as per the GMP indicator on 26th 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 an upper band IPO price of Rs. 100 indicates a listing premium of a healthy 59% for Anlon Technology Solutions Ltd over the listing price. That pre-supposes a listing price of approximately Rs. 159 per share, when Anlon Technology Solutions Ltd lists on 10th January 2023. 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.

Anlon Technology Solutions Limited is a 7 year old company engaged in providing engineering services for engineering systems, built on automotive chassis and allied areas. It mainly caters to airports, high-rise buildings and refineries. Some of its services include Airport Rescue Systems, Fire Fighting vehicles, evacuation and firefighting equipment, Industrial Fire Engines, Runway Rubber removal machines etc.

Broadly, Anlon offers Engineering Services as well as design and fabrication services. The fresh funds will be used to finance working capital. The issue is being lead managed by GYR Capital Advisors Ltd. Link Intime India Private Limited will be the registrars to the issue.