Proventus Agrocom IPO GMP (Grey Market Premium)

Proventus Agrocom IPO GMP
Proventus Agrocom IPO GMP

by Tanushree Jaiswal Last Updated: Jun 05, 2023 - 09:47 am 1.7k Views

Proventus Agrocom IPO, worth ₹69.54 crore comprises of a fresh issue and an offer for sale (OFS) by promoters and early shareholders. The issue is a fixed price issue and the issue price has been set at ₹771 per share. The fresh issue portion entails the issue of 671,773 lakh shares which at the fixed price of ₹771 is worth ₹51.79 crore. The OFS portion entails the issue of 230,140 lakh shares which at the fixed price of the IPO at ₹771 is worth ₹17.74 crore. Overall, the IPO entails the issue of 901,920 lakh shares, which at the fixed IPO price of ₹771 per share works out to total issue size of ₹69.54 crore.

The stock of Proventus Agrocom has a face value of ₹10 and bidders can only bid in minimum lot size of 160 shares each, entailing a minimum investment of ₹123,360 in the IPO at fixed price level of ₹771 per share. That is also the maximum that a retail investor can bid in the IPO. HNIs, NIIs can bid for minimum of 2 lots of 320 shares entailing an investment of ₹246,720. The table below captures the lot sizes permissible.

Application Lots Shares Amount
Retail (Min) 1 160 ₹1,23,360
Retail (Max) 1 160 ₹1,23,360
HNI (Min) 2 320 ₹2,46,720

As per the terms of the offer, 47.50% of the net offer is reserved for the retail investors while the balance of 52.50% of the net offer is reserved for the HNI/NII and other investors in the SME IPO of Proventus Agrocom Ltd. It is a fixed price issue with the price of the IPO already fixed at Rs771 per share. Ajcon Global Services Ltd will act as the market maker for the SME IPO of Proventus Agrocom Ltd. The company has set aside 45,120 shares for the market maker and this quota will be eventually reduced from the HNI / NII quota in the IPO.

The issue opened for subscription on 24th May 2023 and closes for subscription on 26th May 2023 (both days inclusive). The basis of allotment will be finalized on 31st May 2023 and the refunds will be initiated on 01st June 2023. In addition, the demat credits are expected to happen on 02nd June 2023 and the stock is scheduled to list on the stock exchange on 05th June 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. 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 Proventus Agrocom 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 Proventus Agrocom Ltd for the 2 days, data is available.

Date GMP
5-June-2023 ₹14
4-June-2023 ₹14
3-June-2023 ₹14
2-June-2023 ₹12
1-June-2023 ₹12
31-May-2023 ₹12
30-May-2023 ₹18
29-May-2023 ₹17
28-May-2023 ₹17
27-May-2023 ₹17
26-May-2023 ₹18
25-May-2023 ₹30


In the above case, the GMP trend shows that the grey market premium has opened at around ₹30, but has dropped to ₹14 on the second day on which GMP data is available. 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, Proventus Agrocom Ltd has shown very moderate traction in the grey market, but that could be because it is a fixed price issue at a very high base price.

If you consider the fixed price set for the IPO of Proventus Agrocom Ltd at ₹771 per share, then the likely listing price is being signalled at around ₹799 per share as per the GMP indicator on 26th May 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 ₹28 on the fixed price for the IPO set at ₹771 indicates a listing premium of a very moderate 3.63% for Proventus Agrocom Ltd over the listing price. That pre-supposes a listing price of approximately ₹799 per share, when Proventus Agrocom Ltd lists on 05th June 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.

Here is a quick background of Proventus Agrocom Ltd on the NSE SME IPO segment. The company was set up in 2015 as an innovative health food brand to cater to the growing demand for healthy eating. Its product portfolio comprises of the range of dry fruits, nuts, seeds, and berries and is part of the healthy snack value chain via a farm to fork model. This concept of healthy snack with strong dry fruit presence is missing in India and also caters to the growing demand for food products from the organized segment.

Proventus Agrocom is positioned as a one-stop shop for healthy snacking solutions. In recent years, there has been a perceptible shift in consumer preference from unbranded products to branded products; even in tier-2 cities. Proventus sells under the brand name of PROV. It plans to use the fresh funds for working capital of the parent and its subsidiary. The issue will be lead managed by Unistone Capital Private Limited while Skyline Financial Services Ltd will be the registrars to the SME IPO of Proventus Agrocom Ltd.

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.


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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