Senco Gold IPO GMP (Grey Market Premium)

In the above case, the GMP trend shows that the grey market premium has opened at around ₹48, but now its up by ₹103. Of course, we have to await for the actual subscription numbers to flow in when the issue opens for subscription on 04th July 2023, 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, Senco Gold Ltd has shown good traction in the grey market.

If you consider the upper end of the price band of Senco Gold Ltd at ₹317 as the indicative price, then the likely listing price is being signalled at around ₹367 per share as of the GMP indicator on 30th June 2023. One data point to track will be the subscription update on the stock as that would chart the GMP course from here. As mentioned, the institutional QIB subscription is a key trigger for the GMP pricing.

The GMP of ₹50 on a likely upper band pricing of ₹317 indicates a listing premium of a healthy 15.77% for Senco Gold Ltd over the listing price. That pre-supposes a listing price of approximately ₹367 per share, when Senco Gold Ltd lists on 14th July 2023. Of course, these are approximations, so you must keep a margin of safety. However, that would depend on the GMP sustaining over the next few days after the issue opens.

GMP (grey market price) is an important indicator, albeit informal, of likely listing price. One cannot take this price at face value However, the GMP tends to be quite dynamic and changes direction with the flow of news and events. Investors must note here that this is just an informal indication and has no official acceptance. The best thing one can do with the GMP is to observe the trend closely as that gives the best hints on listing status. Focus on the time series trend than on numbers.

Senco Gold Ltd was incorporated in 1994 as a pan-India jewellery retailer and is in the same industry as players like Thangamayil Jewellery and Kalyan Jewellers. The products are current sold under the brand name “Senco Gold & Diamonds.”  Apart from gold and diamond jewellery, Senco also sells jewellery made of silver and platinum, as well as precious and semi-precious stones. It also offers costume jewellery, gold, and silver coins. Currently, Senco Gold Ltd offers over 108,000 designs for gold jewellery and over 46,000 designs for diamond jewellery, which is an elaborate portfolio. It has put in place a pan-Indian team of craftsmen to cater to varying regional and ethnic tastes of Indian customers.

Its key offerings are Everlite (lightweight jewellery), Gossip (silver and fashion) and Aham (jewellery for men). Most of its models cater to the young and the upwardly mobile at an appropriate price tag, which his lower than most jewellery average tags. It has a segment catering to the mass demand for jewellery as well as the D’Signia and Vivaha collections for the creamier market. The company operates through 136 showrooms spread across the length and breadth of India with total area coverage of 409,882 SFT. Around 70 showrooms are owned and operated by the company while 61 are franchises. These showrooms cater to 99 cities spread across 13 states in India. The IPO of Senco Gold Ltd will be lead managed by IIFL Securities, Ambit and SBI Capital Markets. KFIN Technologies Ltd will be the registrar to the issue.