Maitreya Medicare IPO GMP (Grey Market Premium)

Maitreya Medicare IPO opens for subscription on 27th October 2023 and closes for subscription on 01st November 2023. It is a book built issue and the stock of Maitreya Medicare Ltd has a face value of ₹10 per share. The issue price band for the IPO has been fixed in the range of ₹78 to ₹82 per share and the final price will be discovered after the book is built. The IPO of Maitreya Medicare Ltd has only a fresh issue component with no offer for sale (OFS) portion. As part of the fresh issue portion of the IPO, Maitreya Medicare Ltd will issue a total of 18,16,000 shares (18.16 lakhs), which at the upper band IPO price of ₹82 per share aggregates to a total fresh fund raising of ₹14.89 crore. As there is no OFS portion, the size of the fresh issue will also be the total size of the IPO. Hence the overall IPO size will comprise of 18.16 lakh shares, which at the upper IPO price band of ₹82 per share aggregates to ₹14.89 crore.

Like every SME IPO, Maitreya Medicare IPO will also have a market making portion allocation of 1,08,800 shares. The market maker for the issue is Giriraj Stock Broking Private Ltd, and they will provide 2-way quotes to ensure liquidity post listing and low basis costs. The promoter holdings in the company, post the IPO, will dilute from 100.00% to 73.20%. Maitreya Medicare Ltd intends to use the fresh funds for investing in the equity of its subsidiary, Maitreya Hospitals Private Ltd, as well as for redemption of NCDs. Part of the funds will also go towards working capital needs and general expenses. GYR Capital Advisors Private Ltd will be the lead manager to the issue and Link Intime India Private Ltd will be the registrar to the IPO.

About the GMP pricing for Maitreya Medicare Ltd

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 Maitreya Medicare Ltd, we already have GMP data for the last 4 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 Maitreya Medicare Ltd for the 4 days, data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹30, but has since improved to ₹75 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 27th 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, Maitreya Medicare Ltd has shown good traction in the grey market.

If you consider the upper band of the price of the IPO of Maitreya Medicare Ltd at ₹82 per share, the likely listing price is being signalled at around ₹124 per share as per the GMP indicator on 23rd 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 ₹42 on the fixed IPO price of ₹82 indicates a listing premium of a healthy 51.22% for Maitreya Medicare Ltd over the IPO issue price. That pre-supposes a listing price of approximately ₹124 per share, when Maitreya Medicare Ltd lists on 09th November 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 Maitreya Medicare Ltd Solutions IPO

The minimum lot size for the IPO investment will be 1,600 shares. Thus, retail investors can invest a minimum of ₹131,200 (1,600 x ₹82 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 ₹262,400. 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.

The company has allocated 5.99% of the issue size for the market makers to the issue, Giriraj Stock Broking Private Ltd. The net offer (net of market maker allocation) will be allocated to the QIBs, retail investors and the HNI / NII investors with the anchor portion (if any) being carved out of the QIB allocation of shares. The breakdown of the overall IPO of Maitreya Medicare Ltd in terms of the allocation to various categories are captured in the table below.

Like in every SME IPO, the IPO of Maitreya Medicare Ltd also has a market maker. The Market maker typically provides buy and sell quotes post listing to ensure liquidity and low basis risk in the stock. In this case, the makers will be Giriraj Stock Broking Private Ltd, acting as the market maker for the SME IPO of Maitreya Medicare Ltd. The company has set aside 1,08,800 shares for the market maker inventory. 

The issue opens for subscription on 27th October 2023 and closes for subscription on 01st November 2023 (both days inclusive). The basis of allotment will be finalized on 06th November 2023 and the refunds will be initiated on 07th November 2023. In addition, the demat credits are expected to happen on 08th November 2023 and the stock is scheduled to also list on 09th November 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.