Committed Cargo Care IPO GMP (Grey Market Premium)

Committed Cargo Care IPO worth ₹24.98 crore comprises entirely of a fresh issue with no offer for sale (OFS) component. It is a fixed price IPO and the IPO price has been fixed at ₹77 per share. The fresh issue portion of the IPO entails the issue of 32.44 lakh shares which at the fixed IPO price of ₹77 per share is worth ₹24.98 crore. Since there is no OFS component, the fresh issue size of ₹47.03 crore is also the size of the overall IPO.

About the GMP pricing for Committed Cargo Care IPO 

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 Committed Cargo Care Ltd, we already have GMP data for the last 2 days, 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.

How has the GMP panned out in last few days

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 Committed Cargo Care IPO for which the data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹15, but now dropped at ₹6 for which GMP data is available. Of course, we have to await for the actual subscription numbers to flow in after the issue opens for subscription on 06th October 2023 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, Committed Cargo Care Ltd has shown good traction in the grey market.

If you consider the fixed price of the IPO of Committed Cargo Care Ltd at ₹77 per share, then the likely listing price is being signalled at around ₹92 per share as per the GMP indicator on 04th October 2023. 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.

The GMP of ₹15 per share on the fixed IPO price of ₹77 per share indicates a listing premium of a healthy 19.48% for Committed Cargo Care Ltd over the IPO issue price. That pre-supposes a listing price of approximately ₹92 per share, when Committed Cargo Care Ltd lists on 18th October 2023. Of course, these are purely approximations, so you must keep a margin of safety. One needs to observe the trend of GMP closely as that gives the best hints on listing status. Look at the time series trend than the absolute numbers.

How to apply for the Committed Cargo Care IPO

The minimum lot size for the IPO investment will be 1,600 shares. Thus, retail investors can invest a minimum of ₹123,200 (1,600 x ₹77 per share) in the IPO. That is also the maximum that the retail investors can invest in the IPO. HNI / NII investors can invest a minimum of 2 lots comprising of 3,200 shares and having a minimum lot value of ₹246,400. There is no upper limit on what the QIBs as well as what the HNI / NII investors can apply for. The table below captures the break-up of lot sizes for different categories.

As per the terms of the offer; 5.08% of the total issue size is reserved for the Market Makers, 47.46% of offer size for the HNI / NII investors and the balance 47.46% is reserved for the retail investors. The market maker, Nikunj Stock Brokers have been allotted 1,64,800 shares as market making inventory, which would be used by them to offer buy and sell quotes on the stock. The market maker not only offers liquidity to the stock post listing, but also ensures that the basis risk is minimized by giving fine bid and ask spreads on the stock.

The issue opens for subscription on 06th October 2023 and closes for subscription on 10th October 2023. The basis of allotment will be finalized on 13th October 2023 and the refunds will be initiated on 16th October 2023. In addition, the demat credits are expected to happen on 17th October 2023 and the stock is scheduled to also list on 18th October 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.

Read about Committed Cargo Care IPO