SAR Televenture IPO GMP (Grey Market Premium)

SAR Televenture IPO opens for subscription on 01st November 2023 and closes for subscription on 03rd November 2023. The company stock has a face value of ₹2 per share and it is a book building issue with the IPO price band fixed in the range of ₹52 to ₹55 per share, and the price to be discovered in this range. The IPO of SAR Televenture Ltd has only a fresh issue component with no book built portion. As part of the fresh issue portion of the IPO, SAR Televenture Ltd will issue a total of 45,00,000 shares (45 lakh shares), which at the upper IPO band price of ₹55 per share aggregates to a fresh issue of ₹24.75 crore. Since there is no offer for sale portion, the total size of the fresh issue will also be the overall size of the IPO. Hence the total IPO size will also comprise of 45 lakh shares, which at the upper price band of ₹55 per share will aggregate to ₹24.75 crore.

Like every SME IPO, SAR Televenture Ltd also has a market making portion with an inventory allocation of 2,30,000 shares. The market maker for the issue is R.K. Stock Holding Private Ltd and they will provide two-way quotes to ensure liquidity post listing with low basis costs. Post the IPO, the promoter stake in the company will get diluted from 87.8% to 61.46%. The company will use the fresh funds for installation of 5G/4G towers, repayment of secured borrowings, and funding working capital funding gaps. Pantomath Capital Advisors Private Ltd will be the lead manager to the issue, and Skyline Financial Services Private Ltd will be the registrar to the issue.

About SAR Televenture IPO GMP

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 SAR Televenture 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.

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 SAR Televenture IPO for which the data is available.

In the above case, the GMP trend shows that the grey market premium has opened at around ₹17, but has since rallied higher to ₹53 for which the 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 01st November 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, SAR Televenture Ltd has shown good traction in the grey market.

If you consider the upper band price of the IPO of SAR Televenture Ltd at ₹55 per share, then the likely listing price is being signalled at around ₹78 per share as per the GMP indicator on 30th 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 ₹23 on the upper band IPO price of ₹55 per share indicates a listing premium of a healthy 41.82% for SAR Televenture Ltd over the IPO issue price. That pre-supposes a listing price of approximately ₹78 per share, when SAR Televenture Ltd lists on 08th 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 SAR Televenture IPO

The minimum lot size for the IPO investment will be 2,000 shares. Thus, retail investors can invest a minimum of ₹110,000 (2,000 x ₹55 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 4,000 shares and having a minimum lot value of ₹220,000. 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.

SAR Televenture Ltd has allocated 5.11% of the issue size for the market makers to the issue, R.K. Stock Holding Private Ltd. The net offer (net of market maker allocation) will be divided between the qualified institutional buyers (QIBs), retail investors and the HNI / NII investors. The breakdown of the overall IPO of SAR Televenture Ltd in terms of the allocation to various categories are captured in the table below.

The issue opens for subscription on 01st November 2023 and closes for subscription on 03rd 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 also expected to happen on 07th November 2023 and the stock is scheduled to also list on 08th 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.