KFIN Technologies IPO GMP (Grey Market Premium)

KFIN Technologies IPO GMP
KFIN Technologies IPO GMP

IPOs
by 5paisa Research Team Last Updated: 2022-12-29T11:41:08+05:30

KFIN Technologies IPO Rs. 1,500 crore, worth comprises entirely of an offer for sale of the said amount. There is no fresh issue component in this IPO. The offer for sale (OFS) component is by the promoters and early shareholders of the company, which includes General Atlantic Partners, which is the largest shareholder of KFIN Technologies Ltd. Here it must be noted that while the fresh issue component infuses fresh funds into the company, it also is EPS dilutive and equity dilutive. On the other hand, the OFS is just a transfer of shares so there is no fresh infusion of funds, but it also does not dilute the equity. The issue has been priced in the band of Rs. 347 to Rs. 366 per share and the KFIN Technologies IPO allotment price will be discovered post the book building of shares being completed during the IPO process.

The issue opened for subscription on 19th December 2022 and closes for subscription on 21st December 2022 (both days inclusive). The basis of allotment will be finalized on 26th December 2022 and the refunds will be initiated on 27th December 2022. In addition, the demat credits are expected to happen on 28th December 2022 and the stock is scheduled to list on 29th December 2022 on the NSE and the BSE. 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 KFIN Technologies Ltd, we already have GMP data, which should give a reasonable picture of the likely listing performance.

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 KFIN Technologies IPO GMP summary data is available.

Date

GMP

29-Dec-2022

Rs. -3

28-Dec-2022

Rs. -5

27-Dec-2022

Rs. -4

26-Dec-2022

Rs. -5

25-Dec-2022

Rs. 10

24-Dec-2022

Rs. 10

23-Dec-2022

Rs. 10

22-Dec-2022

Rs. 2

21-Dec-2022

Rs. 2

20-Dec-2022

Rs. 3

19-Dec-2022

Rs. 10

18-Dec-2022

Rs. 8

17-Dec-2022

Rs. 8

16-Dec-2022

Rs. 8

15-Dec-2022

Rs. 10

In the above case, the KFIN Technologies IPO GMP trend shows that the grey market premium has opened at around Rs. 10, but has since oscillated between the levels of Rs. 8 and Rs. 11 in the last 4 days. Of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription on 19th December 2002, 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, KFIN Technologies Ltd has shown good traction in the grey market.

If you consider the upper end of the price band of KFIN Technologies Ltd at Rs. 366 as the indicative price, then the likely listing price is being signalled at around Rs. 377 per share as of the GMP indicator on 16th December 2022. 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.

KFIN Technologies IPO GMP of Rs. 11 on a likely upper band pricing of Rs. 366 indicates a listing premium of a rather moderate 3.01% for KFIN Technologies Ltd over the listing price. That pre-supposes a listing price of approximately Rs. 377 per share, when KFIN Technologies Ltd lists on 29th 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.

GMP (grey market premium) 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.

KFIN Technologies Ltd is a major technology-driven financial services platform. It offers shareholder services and solutions to asset managers (mutual funds and AIFs) as well as to corporate issuers. It also has an international footprint across countries like Malaysia, the Philippines and Hong Kong. KFIN Technologies is the largest investor solutions provider to Indian mutual funds, on number of AMCs services, albeit not on AUM. It offers its services to AIFs, wealth managers, corporate issuers and also to pension funds.

KFIN is among the two central record-keeping agencies (CRAs) for the National Pension System ( NPS) in India. In terms of product offerings, KFIN offers Investor Solutions, Issuer Solutions and global value-added shareholder services. The issue is being lead managed by ICICI Securities, Kotak Mahindra Capital, JP Morgan India, IIFL Securities and Jefferies India. Bigshare Services Private Limited will be the registrars to the issue.


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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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