Kaynes Technology India IPO GMP Updates

Kaynes Technology India IPO GMP
Kaynes Technology India IPO GMP

IPOs
by 5paisa Research Team Last Updated: 2022-11-22T12:11:38+05:30

Kaynes Technology India IPO worth Rs.857.82 crore, comprises of a fresh issue of shares worth Rs530 core and an offer for sale of Rs327.82 crore. The offer for sale (OFS) component is by the promoters and early shareholders of the company. The issue has been priced in the band of Rs.559 to Rs.587 per share and the IPO allotment price will be discovered post the book building of shares being completed during the IPO process. 

Kaynes Technology IPO Review | Kaynes Technology India IPO - APPLY or NOT?: 


The issue opens for subscription on 10th November 2022 and closes for subscription on 14th November 2022 (both days inclusive). The basis of allotment will be finalized on 17th November 2022 and the refunds will be initiated on 18th November 2022. In addition, the demat credits are expected to happen on 21st November 2022 and the stock is scheduled to list on 22nd November 2022. 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 Kaynes Technology India Ltd, we already have GMP data for the last 3 days, which should give a reasonable picture of the likely listing performance.

 

Read: Kaynes Technology India Ltd IPO gets 30% anchor allocated


There are 2 factors that impact the GMP. Firstly, the market conditions have a deep impact on the GMP, which includes the levels of the Nifty and Sensex as well as the general IPO market and macro conditions. Secondly, the extent of subscription for the IPO across the retail and the QIB segments also has a deep impact on the GMP as it is indicative of investor interest in the stock. Generally, strong QIB subscription is a trigger for a spike in GMP.


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 Kaynes Technology India Ltd , data is available.

Date

GMP

22-Nov-2022

Rs. 180

21-Nov-2022

Rs. 151

20-Nov-2022

Rs. 222

19-Nov-2022

Rs. 220

18-Nov-2022

Rs. 227

17-Nov-2022

Rs. 205

16-Nov-2022

Rs. 125

15-Nov-2022

Rs. 125

14-Nov-2022

Rs. 138

13-Nov-2022

Rs. 115

12-Nov-2022

Rs. 115

11-Nov-2022

Rs. 87

10-Nov-2022

Rs. 79

9-Nov-2022

Rs. 13

8-Nov-2022

Rs. 13

7-Nov-2022

Rs. 13


In the above case, the GMP trend shows that the grey market premium has opened at around Rs13 and has virtually remained stable at that level. Of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription on 14th November, 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, Kaynes Technology India Ltd has shown limited traction in grey market.


If you consider the upper end of the price band of Kaynes Technology India Ltd at Rs.587 as the indicative price, then the likely listing price is being signalled at around Rs.600 per share. One data point to track will be the subscription update on the stock as that would chart the GMP course from here. As mentioned, the institutional QIB subscription is a key trigger for the GMP pricing, followed by the funded HNI / NII applications.


The GMP of Rs.13 on a likely upper band pricing of Rs.587 indicates a listing premium of a rather tepid 2.21% for Kaynes Technology India Ltd over the listing price. That pre-supposes a listing price of approximately Rs.600 per share, when Kaynes Technology India Ltd lists on 22nd November 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, depending on the quantum and quality of subscriptions.


GMP (grey market price) is an important indicator, albeit informal, of likely listing price. One cannot take this price at face value However, the GMP tends to be quite dynamic and changes direction with the flow of news and events. Investors must note here that this is just an informal indication and has no official acceptance. 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.


Kaynes Technology India Ltd was incorporated in the year 2008, amidst the global financial crisis. is a leading end-to-end and IoT solutions-enabled integrated electronics manufacturing company. Kaynes caters to the needs of sectors like automobiles, industrial segment, aerospace and defence.


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Investment/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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