by Tanushree Jaiswal Last Updated: Aug 11, 2023 - 03:20 pm 3.5k Views
Oriana Power IPO GMP (Grey Market Premium)
Oriana Power IPO worth ₹59.66 crore, comprises entirely of a fresh issue with no offer for sale (OFS) component in the IPO issue. Being a book built IPO, the issue price band has been set in the range of ₹115 to ₹118 per share with IPO issue price to be discovered through book building process. The fresh issue portion entails the issue of 50.556 lakh shares which at the upper band of the IPO price of ₹118 per share is worth ₹59.66 crore. Since there is no OFS portion, the fresh issue size will also the total size of the IPO in the case of Oriana Power Ltd. The fresh funds raised through the IPO will be used for investment in its subsidiary company, capex into technology, equipment, and infrastructure as well as to meet working capital funding gaps. The stock will be listed on the SME segment of the NSE.
Oriana Power IPO has a face value of ₹10 and bidders can only bid in minimum lot size of 1,200 share each, entailing a minimum investment of ₹141,600 in the IPO at the upper band of the IPO price of ₹118 per share. That is also the maximum that a retail investor can bid in the IPO. HNIs and NIIs can bid for minimum of 2 lots of 2,400 shares entailing an investment of ₹283,200. The table below captures the lot sizes permissible.
As per the terms of the offer, 50% of the net offer is reserved for QIB investors, 35% for the retail investors and the balance 15% for the HNI / NII investors. The table below captures this quota allocation for IPO of Oriana Power IPO.
|QIB Shares Offered||Not more than 50.00% of the Net offer|
|NII (HNI) Shares Offered||Not less than 15.00% of the Offer|
|Retail Shares Offered||Not less than 35.00% of the Offer|
Oriana Power IPO is a book built issue with the price of the IPO to discovered in the price band of ₹115 to ₹118 per share. The company has set aside 255,600 shares for the market maker, Share India Securities Ltd. The market maker typically provides liquidity on the counter of the stock post listing by offering buy and sell quotes on a continuous basis. This ensures liquidity on the counter and also reduces the basis risk in the stock.
The issue opens for subscription on 01st August 2023 and closes for subscription on 03rd August 2023 (both days inclusive). The basis of allotment will be finalized on 08th August 2023 and the refunds will be initiated on 09th August 2023. In addition, the demat credits are expected to happen on 10th August 2023 and the stock is scheduled to list on 11th August 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.
Oriana Power IPO GMP details
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 Oriana Power 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.
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 Oriana Power IPO for which the data is available.
In the above case, the GMP trend shows that the grey market premium has opened at around ₹95, and is up by ₹115. 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, Oriana Power Ltd has shown strong price traction in the grey market.
If you consider the upper band of the book built IPO of Oriana Power Ltd at ₹118, then the likely listing price is being signalled at around ₹213 per share as per the GMP indicator on 26th July 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 ₹95 on the upper band of the IPO price of ₹118 per share indicates a listing premium of a very healthy 80.51% for Oriana Power Ltd over the listing price. That pre-supposes a listing price of approximately ₹213 per share, when Oriana Power Ltd lists on 11th August 2023. Of course, these are 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 on numbers.
Brief background of Oriana Power Ltd
Oriana Power Ltd, is an SME IPO on the NSE Emerge Segment which is opening for subscription on 01st August 2023. The company, Oriana Power Ltd, was incorporated in in 2013 to provide total mid-end and high end solar energy solutions. These services are offered to commercial and industrial customers. This not only is what the world is moving towards but presence in the alternate energy also enhances the valuation of companies. We have seen that trend in a number of Indian companies in the power segment.
Oriana Power Ltd offers low carbon energy solutions to its customers which include on-site solar project installation, rooftop and ground mounted system, and off-site solar farms. Oriana Power Ltd has a capex arm and a services arm. Here is what the two divisions do. The capex arm entails the engineering, procurement, construction (EPC) as well as the operation of solar projects. The services arm offers solar energy solutions on a Build, Own, Operate and Transfer (BOOT) model, which is quite popular in infrastructure projects.
The fresh issue portion will be used to invest in technology, equipment, and infrastructure in the core solar solutions business as well as to fill working capital funding gaps and for general corporate purposes. The issue will be lead managed by Corporate Capital Ventures Private Ltd while Skyline Financial Services Private Ltd will be the registrars to the IPO.
Share Market Today
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About the Author
DisclaimerInvestment/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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