Sahana Systems IPO GMP (Grey Market Premium)

Sahana Systems IPO worth ₹32.74 crore comprises entirely of a fresh issue of shares by the company. The price band has been fixed in the range of ₹132 to ₹135. The fresh issue portion entails the issue of 24.25 lakh shares which at the upper end of the price band at ₹135 is worth ₹32.74 crore. Since there is no OFS portion in the IPO, even the overall size of the IPO entails the issue of 24.25 lakh shares, which at the upper price band of ₹135 per share works out to total issue size of ₹32.74 crore.

The stock of Sahana Systems Ltd has a face value of ₹10 and bidders can only bid in minimum lot size of 1,000 share each, entailing a minimum investment of ₹135,000 in the IPO at the upper end of the price band of ₹135 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 2,000 shares entailing an investment of ₹270,000. The table below captures the lot sizes permissible.

As per the terms of the offer, 9.48% of the net offer is reserved for the qualified institutional buyers (QIBs), 47.84% of the offer is reserved for the HNI / NII investors and the balance 42.68% is reserved for the retail investors. The table below captures the gist of the allocation break up across different categories of investors.

It is a Book Built issue with the price band and the final price will be discovered through book building process. Rikhav Securities Ltd will act as the market maker for the SME IPO of Sahana Systems Ltd. The company has set aside 125,000 shares for the market maker and this market maker quota will be adjusted from the HNI / NII portion allocation in the IPO.

The issue opens for subscription on 31st May 2023 and closes for subscription on 02nd June 2023 (both days inclusive). The basis of allotment will be finalized on 07th June 2023 and the refunds will be initiated on 08th June 2023. In addition, the demat credits are expected to happen on 09th June 2023 and the stock is scheduled to list on 12th 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 Sahana Systems 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 Sahana Systems IPO for which data is available.